Next Up for Netflix: Family Plans

Netflix (s NFLX) will introduce additional streaming plans later this year that will offer the ability to stream to multiple devices simultaneously, according to a FAQ for investors published on the company’s website. Details are still to be determined, but the offering could look like a cell phone family plan, with an option to add additional accounts at a lower price point. From the FAQ:

“One option would be to allow an account to add additional concurrent streams (using the analogy of our DVD business, it would be like choosing a higher-priced plan that allows a subscriber to have more DVDs at home)… Or it could be that there is a price point that would encourage multiple accounts in one household.”

Netflix currently allows its streaming-only customers to watch one stream at a time. Customers that have a higher-priced DVD plan can access more than one stream simultaneously. For example, if you pay to have access to three DVDs at a time, you are also able to watch three streams simultaneously.
Offering tiered streaming-only plans makes sense for multiple-family households, but it also helps Netflix to tap into additional revenue opportunities. The investor FAQ mentions the new plans as part of a larger shift toward targeting individual subscribers as opposed to households. This way of thinking opens up a much bigger market opportunity for the company: “We believe there may be an opportunity to change our focus from a household relationship to an individual relationship, since streaming is viewed on personal devices, such as phones, tablets, and laptops, as well as on shared large screen televisions,” the FAQ reads.
The phone and tablet focus especially opens up a whole new slew of additional customers. There are currently about 70 million broadband households in the U.S., but more than 300 million wireless subscriber connections — and the majority of those cell phone subscribers will own smart phones by the end of this year, according to Nielsen.
Family plans with separate profiles for each family member could also help Netflix make better use of its recommendation engine, leveraging its upcoming integration with Facebook. Netflix is reportedly working on a deep integration of the social network, making it possible to connect your Netflix and your Facebook account and share your Netflix viewing choices with your Facebook friends — something you might be more comfortable with if the questionable choices of your offspring don’t show up in your Facebook news stream.
Finally, there’s the issue of account sharing. Some members have reported in the past that they can access more than one stream even with basic plans, and we’ve heard from a few users who share accounts with their friends or extended family. Netflix hasn’t done much to crack down on this behavior, and a new family plan could actually help to convince people to go legit without adding additional restrictions that could turn off honest users.
Would you pay more to access multiple Netflix streams simultaneously and possibly have separate profiles for each family member? Let us know in the comments!