Netflix reported its third quarter numbers today, and the results weren’t pretty. The once-darling of the industry revealed a cataclysmic 145% decrease in net subscribers from the same quarter in 2010, totaling a loss of 810,000. The company’s shares plummeted more than 27% in after-hours trading following the announcement.
Netflix’s CEO, Reed Hastings, and CFO, David Wells, said that management missteps like this summer’s price increase and the Qwikster debacle “greatly upset” customers. According to the execs, the moves have “hurt our hard?earned reputation, and stalled our domestic growth,”
The 60% price increase imposed upon DVD/streaming customers cut Netflix particularly deep, according to Hastings and Wells:
“Our primary issue is many of our long?term members felt shocked by the pricing changes, and more of them have expressed that by cancelling Netflix than we expected,”
The long-term picture doesn’t look much brighter, with the Netflix execs revealing that losses from international expansion are going to outweigh any domestic profits for the next few quarters.
From Hastings and Wells:
“After launching the UK and Ireland, we will pause on opening new international markets until we return to global profitability . . . We plan to do that by increasing our global streaming subscriber base faster than we increase our costs.”
Were Netflix’s Q3 numbers worse than you expected? Better? Do you think the company can hunker down and get though these next few quarters without any more major missteps?
(via Home Media Magazine)
As dismal as Netflix’s future seems at this point in time, their customer service is SO FAR SUPERIOR to Redbox’s that I can only wish them the best. In an attempt to sign up for text messages (in order to get the codes that I USED to get via email – so much easier), I became so frustrated that I WILL NEVER USE REDBOX AGAIN. I am also going to blog about (and forward a copy to my local newspaper) how incredibly obnoxious Redbox is if you happen to be older or technologically challenged – do this, oh, well – try this or that. You know what – it’s not worth it to get a free movie once a month. I’m back to Netflix, Hastings or the Blockbuster box instead. Redbox can KMA – signed a VERY UNHAPPY ex-customer!
So you think Netflix is better because you are too stupid to figure out how to get a free movie from redbox? If you can’t figure out a redbox, how are you able to figure out how to stream?
Just another idiot complaining about getting something for nothing.
The local newspaper is not going to care that you can’t figure out how to sign up for texts.
So you’re unhappy about Redbox because you can’t enter your text enabled cell phone number into Redbox’s website to receive the monthly promo codes?
If you insist on renting physical media, Redbox is the most convenient service readily available. If your region still has an open brick & mortar video store, that’ll be your best bet for convenience and (normally) friendly customer service.
Do you think the company can hunker down and get though these next few quarters without any more major missteps?
Sure!
The 60% price increase was probably the primary reason for the mass exodus, more so than the strategic changes… which no doubt will come eventually.
Like new Coke/Old Coke, Netflix got a fair amount of publicity and maybe just maybe, if it gives ex-subscribers a financial incentive to come back, it will recover the lost market capitalization.