It turns out Netflix’s customers are a little angrier about higher prices than the company expected. Not long after CEO Reed Hastings downplayed potential customer attrition from the company’s recent price hikes, Netflix has lowered its third-quarter guidance. The company now says it expects to lose one million more subscribers this quarter than it previously anticipated.
BTIG Research analyst Richard Greenfield says that Netflix was too optimistic when it predicted the number of angry customers that would actually cancel their accounts. Said Greenfield:
“While Netflix thought they had weathered the worst of the storm when they reported earnings, they clearly underestimated the number of people that would call back in late August/early September to cancel/alter their subscription plan as the price increase was going into effect,”
Netflix’s shares were punished after the announcement of the lowered guidance, dropping nearly 26% by week’s end.
What do you think of this news, Insiders? Did you cancel your Netflix subscription because of the price increase?
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Is the bad news going to keep coming for Netflix, or will the company quickly recover once the angriest customers have cancelled and gone on their way?
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(via Home Media Magazine)
canceled my netflix completely, streaming wasnt up to date and shipping was a pain. Now I only rent at redbox and Blockbuster express.
Me Too.. Those old movies on there all the time. Who wants to pay a fee to watch movies that old.
I don’t see anything good for Netflix. Raise the prices, they have to give something in return.
We haven’t cancelled our account entirely, but we removed the DVD portion and have stuck with only streaming. We are shopping around, though, at competitors- something we had not previously considered because the selection of streaming is pretty minimal.
We still have ours but Im not sure for how much longer. for the price I pay, I can go to Redbox and get my movie instantly. Only downside is I can only have it for a day unless I want to pay more
Coming in October Blockbuster will be offering streaming. Also Redbox will start streaming December 2012. So there will be other choices soon. As for Netflix, Hasting said in his blog that Flix will be adding many more contents to it’s streaming library in the next few months. I just know if it doesn’t improve I will jump ship…
I canceled my Netflix completely same day as price hike was announced. I protest against greed! TOO MANY choices: Redbox. Blockbuster express, Amazon steaming, Hulu plus, library (FREE) and more…I don’t want to pay for Mr. Reed Hastings latte anymore….. (read his remarks 2 month ago….)
I dumped Netflix years ago when their throttling algorithm severely limited my getting new releases. I complained, they said “Too bad. Watch some of our older flix. Rent new movies elsewhere.” I closed my account that day. Re-opened as a new user with different credit card, instantly received all new movies that were said to be “Very Long Wait” on my original account — watched the new movies I wanted to see and closed my second account. I am so glad Redbox came along — even with the delay on new flix. Netflix was, is, and always will be a rip-off.
I knew this was coming. And they said that by raising the prices, that you were still getting a good value. That sounds like a statement coming from a greedy cat with a fat wallet. Look a good deal is only good if it’s cheap in the majority’s eyes! Next on the greedy list was the contract renewall that went south. So come the first of the year, they are going to lose the majority of the rest of their sorry selection base. I’m putting my money to work somewhere else. I give them till the middle of next year and they go belly up.
I am keeping only the streaming portion for now because we do not have any tv programming right now so me or someone else in my family will use it almost every day. but seriously thinking about going with blockbuster if they do streaming depending on the selection.
canceled my netflix and went to BB by mail service and i’m impressed by it.