Netflix admits subscriber loss to be more than expected

Netflix's decision to raise the price of its movie and TV episode rental service is officially costing the business more subscribers than it originally thought. Last July it announced that customers who use both the streaming video service and the DVD mail order service would see their monthly prices go up by 60 percent, which resulted in a massive outcry from many of those customers. Those price increases went into effect this month for new subscribers. Today Netflix issued a financial update which it showed via the chart above that it will have a total of 24 million domestic subscribers this quarter. That's 1 million less subscribers than it predicted it would have back in July.

The loss includes 800,000 fewer DVD mail order customers and 200,000 fewer streaming video subscribers. Oddly the number of people who use both, the same category that suffers from the big price increase, will stay the same at 12 million.

In its update today, Netflix defended its decision to change its business model despite the subscriber loss, saying, "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." It did not speculate on any other  reasons behind the lowering of the subscriber numbers. However, it did say that its financial guidance for the current quarter remains the same as is its international subscription numbers. Netflix's stock price is plunging by over 15 percent at the moment.

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sava700 said,
I've dropped the streaming right after I heard about the Starz fall out..just not worth it after losing them. I kept the Blu-Rays cause I have no other choices in the area but what kills me the most is having to wait another 25+days to get a new released movie?!?!!? WTF netflix... then after it is released thru them it goes on VERY LONG DAMN WAIT for a few weeks so I have to get lucky like playing the lottery when I send another back. I wish there was a way to put holds on other movies and not send me anything else ONLY the one I select that is on long wait so I don't have to keep crossing my fingers.

"WTF netflix" Apparently you don't understand that its the Studios that are responsible for that wait right? Then when it is released you're competing with other Netflix subscribers that also only want blueray. Its Bluray really that much better?

NPGMBR said,

"WTF netflix" Apparently you don't understand that its the Studios that are responsible for that wait right? Then when it is released you're competing with other Netflix subscribers that also only want blueray. Its Bluray really that much better?

NetFlix is a business and doesn't need anyone defending them. We are allowed to not like their service...

That being said, the contract that NetFlix gets from the studios is negotiated between Netflix and the studio. As a result, the contract is both their fault. Seeing as how they are both businesses we could make the logical deducing that they both signed the most favorable deal that results in them both winning.

When it comes to long waits for actual discs that is all Netflix's fault. They can buy more BluRays to meet demand. The studios can't limit how many BluRay discs they can buy to satisfy customer demand...

sava700 said,
I've dropped the streaming right after I heard about the Starz fall out..just not worth it after losing them.
You enjoy their streaming quality? I'm glad Starz is gone.

We are taking a wait and see stance right now, since Starz dropped their contract, we are going to see if they manage to 'eek' up some more studios or services for the streaming. While their selection is fairly good for us, we do the following when it comes to our movie viewing.

Theaters - RARE anymore, costs way too much where we live.
Redbox - 1st Choice for some of the new releases and any movies we want to rent on Blu-Ray or DVD that Netflix doesn't have.
Blockbuster - Rare, but if we do use them, it is for some of the ones that Redbox doesn't have, but then again, with multiple Redboxes in our area, we can usually find something.

Now, if there is another reason for us to consider moving away completely from Netflix as of late is billing issues. They have been making several mistakes with billing our credit card. We changed it out a few months ago on their system, and ever since, it will decline when they try. Then, the plan is instantly cancelled. We re-enter the same card number and everything, and then it will work, but sometimes after a few tries. Very frustrating and odd.

Well! What do you all expect. I went back to Blockbuster. I have the package that allows me to have 3 dvd's out at a time unlimited. I also have unlimited exchanges in the store. What is even better is that I don't have to wait 28 days later for new releases.

I canceled my account after the free trial because many old tv shows (west wing, gilmore girl, x-file) and indie movies were not available.

I agree. Netflix selection and frequency of new shows added sucks. Sidereel and $10 for a megavideo acct is much better. Or just sidereel . Cant watch season 7 of weeds on Netflix. Sr; no problem!

dbdank said,
I agree. Netflix selection and frequency of new shows added sucks. Sidereel and $10 for a megavideo acct is much better. Or just sidereel . Cant watch season 7 of weeds on Netflix. Sr; no problem!
Piracy is wrong. Think of the poor struggling rights holders, won't you? :'(

If we didn't have a 2 year old, I would have cancelled long ago. Their kids selections are awesome but as for the other stuff, it's pretty damn bland. Yes, there are lots of options but that doesn't mean it's quality stuff.

I wish they would add "The Big Bang Theory" to streaming, they have a deal with CBS so I don't see what the hold up is...

NoLiMiT06 said,
I wish they would add "The Big Bang Theory" to streaming, they have a deal with CBS so I don't see what the hold up is...

That will never happen. iTunes and Amazon On Demand lost their CBS comedy rights. Every comedy show from CBS other than How I Met Your Mother got removed for some reason.

Do like most of Europe, have TV tax/fee to pay for the costs, etc... Less commercials and more interesting content.

belto said,
Do like most of Europe, have TV tax/fee to pay for the costs, etc... Less commercials and more interesting content.
Don't be ridiculous. TV licence fee pays for nothing more than substandard shows on a few worthless channels.

I think that the majority of people are stuck with Netflix and stay with Netflix because we already have devices that stream Netflix. Otherwise there are other options but it would cost money to buy another device for the other option. A few of us might have a device with several options.

I never really used streaming and once in a while would use it because I had it. I like watching movies on Bluray and yes it is a big difference and way better then streaming in video and audo. If you say it does not make a difference then you do not have a good setup to utilize the full potential. Since I do not use the streaming I switched to Bluray only.

I too am tired of having to wait a month or longer for new releases and with them hiding most of the new movies it makes it easy for me to miss a movie that I want to watch. It would be the same price to go to Redbox and rent the movie from there plus I would get the movie on release but like many other people I am lazy and it is easier to use Netflix.

Just wait until the postal service closes. There won't be any more mail order movies and with the movie studios charging more for contracts and the ISPs trying to get laws passed to force Netflix to share costs. Netflix will eventually die off. If Dish network adds streaming movie services and later DirectTV do then that is another blow to Netflix.

The biggest looser are cable companies by not adjusting to peoples demands and changes by offering a comparable service over their own networks.

dish network already has streaming plus they bought out the loser with netflix. it will come into full service at the end of this year but you can get it for 3 month gratis. Blockbuster is the loser and you can get games as well. the subscription fee will be competitive.

BillyJack said,
I think that the majority of people are stuck with Netflix and stay with Netflix because we already have devices that stream Netflix. Otherwise there are other options but it would cost money to buy another device for the other option. A few of us might have a device with several options.

I never really used streaming and once in a while would use it because I had it. I like watching movies on Bluray and yes it is a big difference and way better then streaming in video and audo. If you say it does not make a difference then you do not have a good setup to utilize the full potential. Since I do not use the streaming I switched to Bluray only.

I too am tired of having to wait a month or longer for new releases and with them hiding most of the new movies it makes it easy for me to miss a movie that I want to watch. It would be the same price to go to Redbox and rent the movie from there plus I would get the movie on release but like many other people I am lazy and it is easier to use Netflix.

Just wait until the postal service closes. There won't be any more mail order movies and with the movie studios charging more for contracts and the ISPs trying to get laws passed to force Netflix to share costs. Netflix will eventually die off. If Dish network adds streaming movie services and later DirectTV do then that is another blow to Netflix.

The biggest looser are cable companies by not adjusting to peoples demands and changes by offering a comparable service over their own networks.

Dish Network charges like $80/month! But if you're a "new-content" junkie it might be worth it. Personally I like all the older shows that are streaming.

Netflix is great for streaming TV shows. It saved me hundreds of dollars trying new shows and watching every episode. I have been watching all the Star Trek series, do you know how much that would cost if I had to buy the DVDs? Netflix is great for everybody I know. And to those that say the selection is poor......$15 a month and you get a massive amount of TV shows and movies.

So let me get this straight, so NetFlix hiked up the prices so they could be able to pay the greedy studio companies but now they have loss of customers and does not look really good right? Funny how Starz wanted more for their ****ty, dark and stuttering quality for streaming. The only difference I noticed with Starz on NetFlix vs. cable they got a lot more B Horror movies which are not shown on cable. One thing I do not understand is why can't netflix just get it from Sony or Disney the movies straight from them rather than going through Starz or Starz owns both studios? NetFlix needs to have some ****ing balls and tell the studios they can go suck on a juicy lemon.

Honestly, it's not that much lower if you look at the percent difference, so I'm not sure why people fussed and dumped the stock. I'm unequivocally glad that their stock dropped so hard however. I've never been a customer of theirs, but I think that greedy corporations need to be punished for their greed - and the more often, the better.

Too often as consumers do we sit complacently as "The Man" takes us for a ride.

I hope the "shareholders" are happy with this turn of events.

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