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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.