Netflix Offering a Cheaper Subscription for New Customers to Compete with Amazon
Netflix is making efforts to boost the revenue it generates from subscriptions in a bid to buy more licenses for streaming movie and TV shows.
A cheaper subscription is being tested by Netflix for new customers, which means that the company has to stay prepared for another competitive onslaught from Amazon in 2014.
Now, Netflix has offered a plan for $6.99 a month to its customers. The plan by the biggest video-streaming service allows people watch on only one screen at a time. Whereas the basic streaming service offered by the company currently costs $7.99 a month and allows to watch on two screens at the same time.
The company has come up with a new offer to test subscriptions for new customers by figuring out how many screens customers use to access the service.
The company is trying to give Amazon a run for its money by competing with the Amazon video-streaming service included in its prime subscription. The price for it is $79 a year with free two-day shipping.
Arvind Bhatia, an analyst at Sterne Agee, said, "While the lower price could attract new subscribers, it could also somewhat cannibalize current subscribers, given how easy it is to cancel and re-sign up for the service".