Netflix Tests New Lower Streaming Price, Gives CEO 50 Percent Raise
Netflix defied the expectations of industry analysts by actually testing out lower prices as the year comes to a close.
At the same time, the Los Gatos, California, video streaming service announced that its top executives would get massive pay hikes as a pat on the back for jobs well done, according to Business Week. CEO Reed Hastings will see his annual paycheck jump 50 percent, to $3 million, plus another $3 million in stock options.
Right now, those stock options are looking pretty good. Hastings led the company’s stock to a 294-point gain in 2013, the biggest increase of any stock on the Standard & Poor’s 500.
The man in charge of Netflix content, Ted Sarandos, will see his own bank account swell by $2.8 million this coming year, with another $2 million in stock options. In other words, the company’s Number Two Man will make almost as much dough as the man who gives him his marching orders.
While many analysts anticipated that Netflix may boost its monthly streaming subscription price of $7.99 in order to pay for more and better content, the company may be headed in the other direction.
The company announced an experimental price structure that would allow subscribers to shell out just $6.99 per month. The only condition is that they will be able to watch only one Netflix stream at a time.
Currently, users may watch Netflix movies or TV shows on two devices at the same time. For example, Dad could be watching a Clint Eastwood action flick streamed to the living room TV via a Roku device. At the same time, his teenage daughter could be viewing a Zac Efron movie on her iPad in bed.
That possibility will no longer exist under the $6.99 plan. But, under the new experimental plan, Netflix will offer higher prices for more simultaneous streams. According to NBC News, a $9.99 plan will allow three streams at once.
A Netflix spokesperson said that the new pricing will not initially be offered to all customers, and actually, depending on the results of the experiment, may never be.
