Tuesday, December 31, 2013

Netflix tests $6.99 subscription fee to compete with Amazon Prime

Netflix tries out a lower tier subscription price to better compete with Amazon in 2014.

There are more than one video-on-demand services out there, but so far it seems like Netflix is the pack leader.* Even so, big internet names like Amazon are threatening to slow down the growth of the popular video streaming service.

To keep up with its competitor, Netflix is testing out a new $6.99 per month service that is meant to keep the Netflix brand in the consciousness of consumers throughout 2014.

“The new plan likely has at least two goals: 1. Attract the more value conscious consumer.* 2. To more effectively compete with Amazon Prime,” said Sterne Agee analyst Arvind Bhatia.

Amazon currently offers its Prime service for $79 a year, which includes access to Prime Instant Video streaming.* Divide that fee by 12 the subscription price per month comes to $6.67 a month, which is slightly cheaper than Netflix’s new $6.99 (one viewer at a time) service.* The Amazon Prime service also comes with free 2-day shipping for goods purchased through Amazon.

Netflix is continuing to search for growth avenues, and garnering more subscribers via a cheaper subscription fee may lead to just that.* Bhatia, however, noted that the new model may also cannibalize the old service as subscribers can easily cancel their current subscription and re-subscribe to the lower-priced deal.

Source: USAToday

Read More: http://vr-zone.com/articles/netflix-...ime/68202.html

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