Netflix expects to lose a million subscribers over price increase

By Matthew · 24 replies
Sep 15, 2011
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  1. Netflix has adjusted its third quarter forecast today, lowering its subscriber outlook by about one million. In July, the company thought it would close the period with 25 million subscribers,…

    Read the whole story
  2. Me makes it 1,000,001 :) Last I checked like 8 of the top 100 movies are streamable. Pathetic. The rest on Netflix streaming is outdated stuff.
  3. What is this non-sense about "improving services for customers" or "strategically beneficial" for long-term .....

    ...Netflix should just come out and say it as it is: Movie studios are threatened by it and continue to charge much higher fees for streaming services. As such, Netflix had to raise prices to continue to remain profitable.

    It's as simple as that. The movie studios are losing a lot of $ with people streaming content vs. buying DVDs/Blu-Ray directly from them. It's obvious this had to happen sooner or later as Netflix cheap pricing was unsustainable.
  4. MrAnderson

    MrAnderson TS Maniac Posts: 488   +10

    I'm not going anywhere unless the content goes south... I'm not happy about the price increase... but the value is still good. And I can afford it and want them to continue to thrive. They have to do this in order to make moves to succeed in the future. I cannot blame them for that... wow but 1 million... Will so many turn on them...
  5. ramonsterns

    ramonsterns TS Enthusiast Posts: 744   +12

    I think it's time the movie industry get on with the times.
  6. aj_the_kidd

    aj_the_kidd TS Rookie Posts: 555

    Not that i want to do the math but I'm guessing the subscriber loss vs the increase in charges was reasonable, they will take a hit now and then the money will start pouring in again later on. If i had a service like Netflix available where i live i'd use it.
  7. Mizzou

    Mizzou TS Enthusiast Posts: 823

    Have been a Netflix customer for over five years and wasn't happy to see the price increase but have to admit that it remains a good value. Glad to see that DVD distribution is still a part of their strategy going forward, at least for the time being.
  8. As a Netflix Streaming video customer only, I still think Netflix is a great bargain for the price and plan to continue using the service. But if the Starz Entertainment contract is not renewed, I might have to see what other options are out there since I have young children who love the disney cartoons/movies.
  9. gwailo247

    gwailo247 TechSpot Chancellor Posts: 2,010   +18

    It was bad timing on their part to raise prices in an obvious shift to move people to streaming right at the time when their streaming licensing started becoming a problem.

    It's funny that companies still pay millions for marketing and market research, when the internet provides all this feedback for free. I'm glad that so many people cancelled to the point where it affected the company's bottom line, because perhaps this will be a shift to companies paying a bit more attention to the vocal minority of complainers. Netflix assumed that they did not represent the average person, but it seems that they did indeed signal the popular view on the matter.

    The only way that customers can affect change is by voting with their wallets. Now if only people stopped pre-ordering games until quality at release improves, I'd be happy.
  10. 9Nails

    9Nails TechSpot Paladin Posts: 1,215   +177

    I've not become a Netflix customer yet. I've been waiting for a price drop. And this move went in the opposite direction. So it's safe to say that I'll not becoming their customer. I'll continue to rent a Redbox movie now and then, play video games, and maybe do a little cable TV channel surfing from time to time.
  11. Wendig0

    Wendig0 TechSpot Paladin Posts: 1,136   +131

    I dropped Netflix 3 months ago because of their inability to add new movies to the streaming service. Now I pay as I go with Vudu (more expensive, but you get what you pay for), and I get better quality as well.
  12. MilwaukeeMike

    MilwaukeeMike TS Evangelist Posts: 2,890   +1,223

    You make a lot of assumptions... How do you know the cancellations affected them negatively and how do you know it will remain that way in the long run? Do the math... if you lose 5% of your customers but raise the price by 30% you come out WAY ahead. And you currently can't stream netflix in Canada (I've tried), because it's not available. Streaming isn't bound by geography, while DVDs are. This allows them expansion opportunities.

    Why would you be glad they'd lose money? So they'd do what you want? They're going to do what's best for them, and you're going to spend your money on what's best for you. If Netflix can't align those interests that's their problem, you can find a competitor. They're not the govt, we're not stuck with them.

    Don't forget the 'vocal minority' is just that... a minority. There's no end to changing policies to appease the complainers. You don't think Netflix would LOVE to be streaming you box office titles right now for $20/month?
  13. This article reminded me to cancel my Netflix. I've been being charged for the past 3 months without using it at all. There's never anything good to watch.
  14. @MilwaukeeMike: What? Of course you can stream Netflix in Canada, don't make assumptions just because you're computer illiterate. You probably tried to stream within Canada with an American account, obviously they'll block that. If not, then you just fail altogether.
  15. gwailo247

    gwailo247 TechSpot Chancellor Posts: 2,010   +18

    Did you actually read the article, or are you just talking out of your cheese hole? Did you notice the part where they lost 20% of their stock price?

    80% < 100%. But that's just my assumption.

    I am glad that people are voting with their wallets and protesting something they don't like.

    Moving on with your reading comprehension fail, a million people cancelled their accounts. That's quite a bit. So when all those "complainers" started posting, Netflix assumed (hey there is that word again) that it's just a a bunch of whiners, and that everyone will continue paying the higher prices. But lo and behold, for every whiner, there were 10-100 people who cancelled their account without posting.

    Losing a million customers is pretty bad when you are a public company, even in Milwaukee.
  16. Zilpha

    Zilpha TS Enthusiast Posts: 319

    I canceled my subscription several months ago after exhausting pretty much every good title out there. It's a novel idea, but without the backing of the big studios there's too much of a content gap. I'm not surprised they had to adjust their subscriber forecast.
  17. Vrmithrax

    Vrmithrax TechSpot Paladin Posts: 1,352   +293

    That occurred to me as well, until it became rather obvious that this move was precisely BECAUSE the streaming licensing was become a problem. The greedy studios started demanding higher cuts, trying to renegotiate new deals, even dropping out when Netflix couldn't pony up a dramatic increase in fees (yah I'm talking about you, Starz)... Netflix had to split the streaming side of their business to be able to properly allocate resources towards acquiring new/better content - or, in some cases, just try to keep the stuff they currently have as their costs increased. Their streaming service started out as a nice little bonus feature they were trying out, and has turned into a huge juggernaut. I didn't like the increase, but I am chalking it up to growing pains... We'll see if Netflix can actually make good on better content now.
  18. lipe123

    lipe123 TS Evangelist Posts: 718   +236

    I would personally pay them 25$ a month if they deliver the damn content.

    Although I'm from Canada and the picture here is much different the fact of the matter is that there just isn't enough content to make it worth my while.

    Sure they can raise the price but then the service has to raise as well.
  19. ikesmasher

    ikesmasher TS Evangelist Posts: 2,999   +1,318

    I wish they would cancel their DVD service. that would make them put actual movies on stream.
    Of course, they can't do that. people still want to get their DVDs. Which they can't be blamed for, if they aren't as technical as some.
  20. Yeah, but bottom line (pun intended) is its only 5%. That loss is way overcome by the 50% price increase. Funny thing is, many people canceled way before they had to, and Netflix got the float on their monthly fee because they didn't refund any money. Some people could have had 3 more weeks of service. Another chunk in Netflix's pockets. Smart move you arrogant CEO pr!ck.
  21. Netflix streaming is a fantastic bargain in my book. The selection is deep and I am looking forward (hopefully) for it to continue to get deeper.
  22. SNGX1275

    SNGX1275 TS Forces Special Posts: 10,742   +421

    Earlier today I got (and I imagine everyone that uses Netflix did) an email from the CEO. I'll post it here for those that quit Netflix or didn't subscribe in the first place.

    Really sounds like 2 different companies now. That will help in forcing Netflix to get more streaming.
  23. It all comes down to GREED! That's what America is all about!
  24. Mizzou

    Mizzou TS Enthusiast Posts: 823

    In case you're not aware, quality content costs money ... actually quite a bit of money.
  25. You mean unverified respondents, or lets call it what it is dubious. The money spent is in qualifying the respondents. There is no free feedback and yes I do market research for a living.

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