News

Netflix feels the pain…loses one million more subs than expected since price hike

Posted by: Dan at 9/15/2011 3:51 PM
Back in July, I posted about Netflix raising their rates (on the disk-to-door side of the business) for a second time this year and how I wondered if I would keep my subscription to their service.  As it turns out, I decided to cancel the DVD to the house and stick with just the $7.99 streaming service. 
 
Apparently, I was not alone as today Netflix officially lowered their subscriber estimates for the current fiscal quarter that ends in two weeks.  The company had an additional NET LOSS of one Million subscribers (800K DVD-by-mail and 200K streaming) over their initial estimates since the price hike was announced in July.  So we have a classic case of a company outsmarting themselves and thinking that their customers would forgive and forget.  Oops.
 
I normally don’t take glee in a company struggling, but in this case, Netflix can only look in the mirror and realize they shot themselves in the foot with their own arrogance.  It will be interesting to see if Netflix can fulfill their financial and subscriber promises for the remainder of the year or if they will have to go back to their remaining customers with another price hike come 2012 (or sooner.)
 
I personally will give them until the end of the year to get their streaming service more up to date or I will discontinue that as well, but I am not expecting much from them.  It is expected that Netflix will lose Starz Play (and the ability to stream Disney content and many other excellent movies) due to a hefty fee increase request from Starz.  So for all their talk of improving the streaming service, Netflix has been more promise than action to date.