Netflix Looking to Tinker with Pricing Tiers, More Personalized Accounts

by Steve Smith, Apr 20, 2011, 12:28 PM

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I know people who share single Netflix accounts across households, even states. One teenager told me recently that her longtime ex-boyfriend and members of his family still use her mother's login to access the service. You have to wonder whether Netflix is even bothering to monitor this kind of homegrown account piracy. I wonder what that recommendation queue and viewing history must look like. With several families making choices across multiple households on a single account, Netflix's signature recommendation engine gets blown to hell, I imagine.

Clearly, the company is thinking this one through and planning on tiered subscription models and social media integration that discourage account abuse and also preserve more genuine video personalization. As reported in GigaOm and Investors Business Daily, Netflix is experimenting with some new distribution and account models.

In an investor's FAQ, the company says it sees a large opportunity in shifting its focus from households to individual accounts. "As we think about this shift from a household to a personal relationship, we are starting to think internally that our opportunity could be viewed as the number of mobile phone subscribers, a group that both invests in electronic content and can afford $7.99 for home entertainment." The FAQ goes on to suggest that later this year Netflix may offer different pricing for households to allow multiple streams to run at once so different members of a single account could access video via mobile or other devices. "Our long-term goal is to evolve the Netflix service so that it feels more natural to have a personal account. We will also be working on broader Facebook integration which we hope will further the notion of personal accounts."

As IBD has reported, Netflix is testing Facebook integration with some users. By linking a single account to multiple but specific users through, say, a Facebook login, Netflix could let an account create individualized profiles. Then each user would get his or her own queue, recommendations and sharing. It imagines that a Facebook integration could broaden Netflix's recommendation reach by leveraging the social graph, allowing friends to swap and compare queues.

Of course Netflix leveraging Facebook may be concurrent with Facebook itself opening a multiplex within its confines. Like the last great juggernaut of online, Google, Facebook is becoming a platform for third parties that continues to be tempted to compete with its own partners.

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