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)
I went from 1 DVD and streaming to streaming only. My cost was reduced 20%. I have been getting new titles elsewhere anyway. I am content.
I cancelled my Netflix service completely. I didn’t stream often and rarely received new releases when they were at the top of my queue. I can easily get new releases from Redbox, so I’ll stick with them.
I don’t get this. If you don’t stream, Netflix LOWERED the price for DVD-only plans.
So you just cancelled out of principle??
Sounds like he canceled mainly because he wasn’t getting the DVDs he wanted most. The price change probably got him thinking about it.
Besser is obviously working for Netflix. Lets let him and his overlords know that their move is bulls**t by cancelling even more. Hurt them. Make them lower their prices BELOW what they even had before. Raising their prices was a d**k move to begin with. Its wonderful to see them spanked.
We went with streaming only because there plenty of movies to choose from. I do think the worst is yet to come for Netflix. If they lose Starz movies and think that customers will be content with “B” movies, they have more to lose.
I didn’t cancel and I won’t. We stream a lot and get a lot of use out of the discs too. I would spend more money than I am now with the price increase. Why cancel?
because you can get them to lower their prices. Look at what they did. Look at any company that has little or no competition. Imagine Netflix in ten years, owning you, having no one to step in their way, and how much you will be griping about paying. In thirty years our kids will be paying for air, unless we do something NOW. THATS why.
Have you heard about the Netflix split to Netflix for streaming and Qwickster for DVDs? If Netflix was looking for a way to alienate the rest of their customer base, I believe that they have found the perfect solution.
Yes, for those of us that wanted to float back and forth between streaming and disks month to month, it’s going to be more difficult, since we will have to log into two websites now. Also, all of those iphone apps that allow you to manage your account will have to be modified.
The iPhone app doesn’t allow you to manage your dvd queue. At least the one I downloaded last week does not.
I don’t really understand the “log in to 2 different websites” thing. That is only true if you do your streaming via PC. If you use another device for streaming, you basically link the device to the account and you never log in again. You always had to log in to manage the DVD queue.
Obviously you can afford it and don’t have anything to worry about then.
I have not dropped Netflix, but I am going to next weekend, before the first instance where I would have to pay the new “enhanced” price. When that happens I will get the streaming only plan and drop DVD deliveries.
I am not angry. I am making an economic decision based on my viewing habits.
Plus, how could my dropping Netflix hurt them? It’s only the cost of a couple lattes. ;-)
From what I am hearing alot of people liked the low cost streaming and 1 out plan which is where the cost went up from $10 to $16. They probably are gonna try to go without for a while and/or try out other series, then rejoin once some titles add up. Sure some people might never rejoin, but I think many will because it’s still a fair deal.
I stream only, but have noticed something odd. When I stream through my XBox360, it drops the signal fairly often, but if I stream through the Wii, it almost NEVER has that problem. Anyone else experiencing something similar?
I actually used to have the opposite problem when I had netflix.
I’m not angry about this. I have a streaming-only plan. However, I am open to changing to the next company that does the same thing as Netflix for a lower price. The jump in cost simply gave future competitors a shot in the arm. Their poor business decision will cost them even more customers when a competitor starts operating. If I were Netflix, I would have increased prices incrementally while letting the public know the reason. The jump in price had the appearance of people being taken for granted.
I will put my account on hold next week while I wait for Netflix’s Quickster dvd only website to go live before I make any decisions
I cancelled the dvd portion of the plan, picked up the blockbuster express plan which gives you another dvd as a swap when you return the dvd mailer to the store. Plus Netflix streaming gets throttled by my ISP Clearwire anyway so my movies online have to load several times during the show.
This morning I got the pathetic “apology” letter from Netflix CEO now announcing they are splitting the two services completely. The letter read like something you would send to a child, about how he screwed up…lol. The only reason the email was sent at all was because of what this article says. They are losing more people than they bargained for. A month ago, he said in the media that the attrition was expected and acceptable and calculated, and he made it sound like no big deal. So what do they do? Split the two entities entirely…and send out an email with a lame fake apology laden with lies, thinking that will appease everyone. You will not be able to search from one to the other. Amazing. This company has some set of balls on it… I tell you that. I don’t care now if Netflix cuts their price by 80%… they will NEVER get another dime of my money. Shameful.
After the Netflix split, the DVD-only company is to be named “Qwikster”. Here’s a link to a youtube message they put out: http://www.youtube.com/watch?feature=player_embedded&v=c8Tn8n5CIPk
I put my account on hold right before the price change. I’m waiting to see if they will change anything since they lost so many. I used their DVD and streaming. i streamed tv shows and movies from them almost every day. We would go through about 10 dvds a month too. Miss it. But not sure I’m willing to pay the price.
We simply cancelled the DVD part as well. Our 10 month old loves Barney and several of the other kid shows that are available instantly. There’s also a lot of shows and movies for our pre-teen, and movies that my wife and I enjoy as well. We were only using one or two DVDS a month so canceling that wasn’t a big deal. We just use VUDU for new releases or anything else that we can’t get from Netflix.
I cancelled streaming. I loved it but they did not have enough titles to pay for it as a separate service. If they had all their titles on streaming I would rather do that than to wait for titles in the mail or to get a broken dvd after a few days of waiting or even get a duplicate of something I got at redbox and didn’t get out of my queue fast enough. I prefer Redbox over netflix but only stay with netflix for the selection of older movies and tv series that they have, for new releases I go to Redbox. Netflix is a better deal if you can rent often enough to get more than 8 to 10 a month but if you rent just newer dvds or less than 9 a month. Cancel your netflix and save with redbox!
I will be dropping the streaming part for $8 but keeping 2 DVD’s at a time. Not sure about dropping that as Redbox doesn’t always have the older movies I often watch.
I have only the streaming service. I cancelled the disk delivery on the fist price hike. I would pay more for the streaming service if they had a better selection. If the selection they have now is reduced to only old movies I will probably quit the service. My advice to Netflix is to buy more content for the streaming service!
I’m undecided and stream both Netflix and Hulu. Not sure which we prefer yet but will settle on just one for economic reasons. They both have similar advantages and Hulu seems to have more odd movies that Netflix, but seem to have a better selection on some of the current TV shows than Netflix.
Only if hulu didn’t have commercials
That’s one main reason why I liked Netflix
If I wanted commercials I’d just get cable in TiVo it.
I canceled streaming and kept dvds by mail. We like their selection of british mysteries
not available elsewhere.
We lowered down to streaming only. It looks as if Starz will be dropping out also. This will lower the newer content even more. If the poor buffering continues via Xbox I may decide to cancel. I have a strong internet connection and live in a strong signal area but only have issues with Netflix.
I cancelled when my August membership was up because I refuse to pay the new prices………….a lot of it is “for principle’s sake”, I felt insulted by the way it was all handled and Netflix’s (good old Reed Hastings!) callous and arrogant attitude……. Right now I am on a free trial with Blockbuster and get Redbox once a week or so. And I read more books now! I might go back to Netflix if they restored their better pricing or handled it more fairly……or not……..they dont really deserve my business.
Yes, I know what you mean about reading more books! I do too, now – it’s a good thing, right?
Reed Hastings has a condescending attitude toward his customers. I remember when he stated that most Netflix customers don’t understand when a new DVD title is coming out so the 28-day delay imposed by the studios won’t matter. Really? Most Netflix customers know how to look up release news on IMDb, VideoETA, and comingsoon.net.
I put my Netflix account on hold after receiving several cracked discs in my last billing period, not because of the price increase. I went on a free trial at Blockbuster Online, too (something I thought I’d never do) to see how they’re doing under Dish management; I may keep the service (even though they are pricier than Netflix) if they manage to not send me any broken discs. I am also using my local library more for both books and DVDs. I find myself reading more as well, which I agree, is a good thing.
We had 3 dvds out at a time and streaming. The price was going to jump up $7! So, we cancelled the dvds and kept streaming. Now, I think we’re going to put our account on hold next week and see how we feel. We have so many issues with buffering and being kicked off due to Netflix servers. We have no buffer problems from Hulu or other streamable websites. Netflix is losing movies and I have to go to Instant Watcher to see all titles that are available and that’s just ridiculous. Netflix should show you all titles when you click ‘ SEE ALL TITLES’.
I cancelled the dvds, because of the additional price when you have both, and it takes forever to get new releases… many times I had to add filler because I wasn’t receiving anything.
Netflix fell into the same hole as alot the other companies- their secondary service (streaming) overrode their main service (dvd’s by mail). Like how people are dropping the tv part of cable, but keeping the internet part of cable.
So instead of talking to the customers to see what they can do, the best thing they came up with is to split them up and concentrate on which trend makes more money this week.
The only thing is, the trend I see happening is more and more movie and tv companies starting to break off and offer their own streaming, (Disney…coincidentally dropping off from netflix…..wait for it…coming soon..) by the time this whole thing hits a point, us customers will need a separate subscription for everything we want to watch or see.
I also received the generic apology letter from the ceo- I love that these corp heads think we are 3 years old. I spend the whole time thinking, what? Are you that out of touch with your customers? Then I remembered, yeah, they are.
Sadly, though, that seems to be the new thing to do with companies, don’t help the customers, just apologize like a phoney and leave it at that.
Had cancelled the discs a year ago or so because I wasn’t watching discs quickly enough to justify the costs. Although the streaming movies stink, they have a good amount of tv shows. The Starz movies are by far the best ones on there, but I find myself watching about 90% tv shows and only about 10% movies anyway.
I personally think most people completely overreacted to the price hike. Netflix didn’t handle it very well, but unfortunately they are facing a huge price hike themselves and were just positioning themselves. Also unfortunately for Netflix, Redbox could not be hotter at the moment so that it hurting them quite a bit.
I cancelled my Netflix because I used to be able to stream to multiple devices (computer and TV thru the Xbox) and get 1 DVD in the mail. The price cut was a double whammy for me because they cut the streaming to 1 device at a time and no more DVD’s. I went to Hulu Plus because they have more current and past seasons of TV shows.
didnt cancel a thing got i dvd at a time and instant streaming if all my favorite clasic movies and tv shows $17 a month is not too much to pay for all that (just one thing tho u have all the star trek series on streaming except for ds9 u get that and u have a member for life
As bad as things have been for Netflix, I wonder how the US Postal Services problem’s might hurt their by mail service. The USPS is talking about closing distrubution centers, many post offices, and stopping Saturday delivery could change Netflix into a “online only” company. Only time will tell.
I was a 4 DVD at a time Netflix customer but a simple thing like the USPS changing my home delivery from noon to late in the day made it not work for me. Long live Redbox!
I was with NetFlix for years on end. I am now with BlockBuster.
$16.50 a month. I get 16 DVDs a month. Two a week in the mail. Then two
a week from the store, when I take the two from the mail back. Also I am now getting six to eight free 99 cent movies a month. They have tons of them at the store.So I am getting 22 – 24 movies a month. $16.50 not bad at all.
Sorry NetFlix. You just bit the hand that feeds you.
And I have said good bye.
At first, I had no drop outs with Netflix video but recently I have started having them on every video. Fortunately I figured out how to restart the shows relatively quickly using my Sony bluray dvd player remote control instead of just waiting and waiting for the show to resume. No big deal !!!
I only had steaming, I cancelled my subscription for the fact that there are not that many new releases been release at Netflix, Redbox is always my #1 choice for new releases
I was a long time loyal subscriber to Netflix (10+years), but this last price increase and the way it was handled was the last straw. I kept my DVD plan until the day I would have had to pay the increased rate, and then I canceled it. I had the 4 at a time plan with Bluray and very seldom did I get a new release. Every title that I wanted to see was a “long wait”, and I had to pay extra to wait for a Bluray. I singed up for Blockbuster and have been very happy with their service, getting new release while they are still new and not paying extra for Blurays. I think that Blockbuster found out a long time ago what being arrogant and not caring about your customers can do. I am glad that people are outraged and cancelling Netflix, maybe they will learn about arrogance the hard way.
We had both DVDs and streaming. The most we saw on streaming were old TV shows that you can’t get anymore and an occasional movie that surprised us that it was half way decent and we wouldn’t have rented anyway. Now we have the DVDs only and are just fine and we pay less. We also talked to Netflix about canceling but after talking to them to understand why and much consideration, there was no reason to cancel. We still gt new release from Redbox and see are old favorites from Netflix.
Alot of things have not been mentioned that also are attribrutes to people canceling accounts. They changed the way gift subscriptions could be purchased. For the past 4+ years I was Given a Free Year (3 out at a time) Gift Code for my Birthday, but this past July is was not offered any longer so therefore my subscribtion was up. I had pending credits thru the years with their price changes and computer issues so I was expecting them to add the credits total and take off the very first month I would ever pay ( you would think ) but was told their system can not process the information and I wanted to use the credits it would have to be consectutive months. So I am forced to pay for the next 2 months to use all the money that was in my account. Something is not right here and the will be losing me as well now. I understand business, but do not understand shady business practices.
I cancelled my subscription, New CEO is going to put them in the ground, Netflix got to big, And as soon as they put other companies out of business, Now they think they can raise prices and do whatever they want to screw the AMERICAN PEOPLE out of their money to make them (netflix) rich, It doesn’t take a rocket sceintist to fiqure this out.
I have had netflix for several years. I was on the one-dvd-at-a-time plus the streaming. I was relaxed about getting dvd’s by mail, maybe only 2-3 per month, but it was nice that there wasnt any real penalties for taking your time watching the dvd. The streaming service was nice, I got to watch some tv shows that I had not seen, as well as some older movies that I had not seen or wanted to watch again, mixed with an occasional “new” movie. It was nice, and under 10 dollars a month, so it wasnt a strain on my budget. HOWEVER, I have now cancelled both services. I could not justify a 60% increase in ANY optional entertainment expense. Times are tough. Jobs are scarce and often temporary compaired to 30 years ago. Money is tight. Entertainment is NOT a necessary expense, just a “nice-to-have” expense. Now, two seperate companys with two different monthly charges, two different websites, two different lists to keep up with… Too much money, too much hassle. I’ll stick with cable, and redbox. Wise up, Netflix and turn the clock back on a bad idea.
I recently had a 1 DVD at a time subscription and use the streaming a lot. I really hadn’t used the DVD service in 5 months and had my last DVD sitting on my shelf until I sent it back before the deadline for getting charged the full price last week. Anyways, I downgraded my subscription because it wasn’t economical for me to keep both subscriptions. When I initially became a client, I had a 3 at a time subscription but did not like the cost and found that I streamed much more. If Netflix does not do something to provide better service…I will leave streaming. I am constantly refreshing TV shows so that the words match the picture.
I went from DVD only to Streaming only. I have an account on VUDU & Amazon. When I want new releases I use those two. When I want an older ‘classic’ or something to put me to sleep, I use Netflix. I haven’t used Redbox for almost a year since I don’t have a Bluray player & my tvs are internet ready & have 1080p.
Apparently people like big macs (quick and crappy) and not filet mignon (wait 2 days for the mail to come with a shinny blue ray). Blue Rays of new movies is still the most cost effective through netflix, just need to get one a week and it’s cheaper than redbox. Thats the best way to watch a movie these days without going to the theater, unless you like watching VHS quality on your 60 inch flat screen (streaming)
My family still saves money. We do NOT have DISH or Direct, and No cable for us either. I love the fact comcast customers have no problems paying 5%- 10% more each year, for nothing new. Same stations, same service. we pay for both services, while others pay triple then the cost of both services. I enjoy on-demand commercial free movies and TV shows, and will continue to pay (until it gets over $30.00) then we will think other routes. Brovo netflix to try to make an extra buck, for those who whine, YOU create the service, and see how much it costs to get a “new release” dvd.
I had the one-DVD-at-a-time and unlimited streaming plan. That was great for my family and I. But withthe price hike, I opted to cancel the DVD portion and stick with the streaming only. The best thing about the streaming is all of the National Geographic, Nove, and History Channel documentaries. That makes it worth it. I have several issues with Netflix, but the biggest one is lack of available movies. Why is it that they have the 2nd monive in a trilogy available, but not the first or the third? The trilogy I am speaking of is over 5 years old, so we’re not talking about a new release here. And why is is that there are movie in their collection that are only available on disc? If they paid the licensing to be able to distribute the films, does the medium matter? I’m not an attorney (THANK GOD ALMIGHTY!), but if Hollywood is involved, it must be some legal BS.
We ended canceling our whole service, partly because of the price increase, but also do to cost cutting measures, since I’ve been out of work for almost 5 months. Now we just put up with the commercials for Hulu and watch the DVD’s we already have.