Netflix Looks to Keep Growth in the Family

As shares of Netflix (NASDAQ: NFLX ) have climbed over the past two years,
analysts and industry pundits have wondered repeatedly when the streaming video
company would hit a glass ceiling: No way could Netflix shares pass $200. No way
can the companys subscriber base reach 20 million. No way can the company
continue to sign new content partners. The company has met and surpassed all of
these hurdles, but even now theyre facing new challenges . How will Netflix fend
off new competitors like Amazon (NASDAQ: AMZN ) and keep growing its membership?
Netflix offered a preview of the future strategy earlier this week, announcing
it would begin offering family plan subscription packages later this year that
would allow multiple streaming from one Netflix account, which would, for
example, let kids watch a movie on a computer while parents watch one on TV.
Current Netflix subscriptions, including the $8-a-month streaming-only option
that has fueled the companys success in the past six months, allow audiences to
stream only one movie or television show at a time, regardless of what device
(television, smartphone, etc.) is being used. The plan should bring in new
customers as well as begin culling more revenue from existing subscribers.
Netflix will likely discuss the plans during its earnings call next week, but
investors may also hear about other new pay models, as this marks a great time
for the company to diversify revenue streams.   It would also make sense for
Netflix to begin offering premium memberships that give access to a broader
range of movies and television. As it becomes more difficult for Netflix to
convince content partners to continue giving audiences unlimited access, premium
Netflix memberships would be an ideal way to satisfy both content providers and
audiences. The groundwork for this pricing model is also ingrained in the
audience already it would be just one more step on Netflixs way to becoming a
true cable competitor. Its also possible that Netflix will introduce a
lower-cost membership to its streaming service, albeit one that is advertising
supported. Competitor Hulu hasnt found the same robust audience as Netflix, but
it has proven that a premium subscription streaming service can also host ads
and be successful (Hulu Plus is on track to hit a million subscribers within its
first eight months of business.)   As of this writing, Anthony John Agnello did
not own a position in any of the stocks named here. Follow him on Twitter at 
@ajohnagnello  and  become a fan of  InvestorPlace on Facebook.