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Summary:

Netflix (NSDQ: NFLX) users are voting with their feet: the company said Thursday that it expects to lose 1 million customers this quarter af…

Netflix
photo: AP Images

Netflix (NSDQ: NFLX) users are voting with their feet: the company said Thursday that it expects to lose 1 million customers this quarter after it raised prices for customers who wanted access to both DVDs and online content.

The upside is that Netflix said its financial projections for the quarter will not be affected by the drop-off in customers, but it’s obviously not a great piece of news to have to announce. Around 80 percent of the now-departed customers were DVD-only subscribers, while Netflix said that the number of subscribers who pay for access to both DVDs and streamed content will remain unchanged.

Netflix used to offer a subscription plan that offered a discount on the total price of its DVD service and its streaming video service, but announced in July that as of September 1st, customers would have to pay full price for both services: a 60 percent increase in the cost of both DVDs and streaming.

“We know our decision to split our services has upset many of our subscribers, which we don’t take lightly, but we believe this split will help us make our services better for subscribers and shareholders for years to come,” Netflix said in a statement (click for PDF) posted on its investor-relations Web site. But investors were not pleased, and sent the company’s stock down 15 percent in midday trading.

  1. six weeks ago they were projecting between 2 and 2.5 million.

    so either people dramatically changed their attitude about the hike, or Netflix is lying.

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    1. projections are just that: projections. Their quality gets better as time goes on and they get more information.

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    2. Streaming rules. Down with DVD.

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  2. How many subscribers do they have overall?

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  3. They (Netflix) better stream some new movies or they are going to lose a lot more customers

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    1. You raise an important point.  A lot of the anecdotal feedback I’ve seen has been along these lines; i.e., “I don’t mind paying more for a better product, but the product is not getting better.”  Expanding streaming agreements is not cheap, but lagging in new content costs Netflix even more.  With Amazon continuing to grow its streaming options, NFLX had better keep improving.

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  4. I canceled my account when they announced the price hike. They have emailed several times since trying to get me to come back. Not going to happen.

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  5. I tried their free 30 day trial about a year ago and back then I couldn’t bring myself to pay $10 for their service…and now they want $16 for the same thing? *NO WAY!* 

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  6. Unless the video distribution and cable companies come to their senses and figure out that most consumers want A la carte services with more choices, their business will continue to decline.

    Many, many people are canceling their cable and video rental subscriptions initially for economic reasons but then on a permanent basis when they determine they aren’t quite as addicted to watching television and movies as previously thought. Many actually acquire lives.

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  7. NoNetflix@AOL.com Thursday, September 15, 2011

    Exactly why I left these bozo’s.  I too get the emails to come back (at full price).  Go pound sand. 

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  8. their prices are completely fair and worth the money for content provided.  Losing customers that do not pay enough to cover costs is a good thing for the long term health of the company.  Netflix would go out of business if it tried to give people services that weren’t paid for adequately by subscription fees.

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  9. I dropped the DVD service and now only get the streaming. There is so much on the streaming that I had not watched a DVD in 6 months. The price change just motivated me to drop the DVD’s, something I should have done months ago.

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  10. At the end of the day if you raise prices without any additional incentive for those reasons, you will lose customers.  Netflix’s online content selection is pathetic and now Starz is pulling out.  They are dead in the water if they don’t get good content online.

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