Netflix stock price plummets after losing 810,000 subscribers

Netflix's third quarter 2011 financial results are out and even though the streaming movie and TV show service warned investors it would show a loss in subscribers for the period, the final numbers were below expectations. The company announced that it lost 810,000 total subscribers in the three month period that ended September 30. That has caused Netflix's stock price to plunge down over 26 percent in after hours trading.

These results show the huge mistakes that Netflix caused for itself earlier this year when it announced a 60 percent price hike for people who wanted to get both the streaming video service and its mail order DVD service. You have to wonder why Netflix decided to make such a sudden move, especially since up until that time it had the confidence of its customer base.

The big problem with Netflix management isn't that it raised prices. It's that the company still feels that it was a good move and won't change its mind. In its third quarter financial results letter today, Netflix said that less than half of its streaming customers also choose to sign up for the mail order DVD business. The company seems to believe that it should concentrate its efforts on the streaming business.

This seems a bit short sighted. Yes, the mail order DVD business will eventually disappear but at the moment it still offers customers a way to get movies and TV shows that are not available on the streaming service. Despite what Netflix might think, many believe that the company should restore some kind of hybrid plan that offers a lower price if customers get both services. It certainly would be a way to win subscribers back in the long run.

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They are stupid...

I had the plan that was $17 a month or so for unlimited streaming and three DVDs at a time. I wasn't rotating these DVDs effectively and would keep them for months at a time.

With their changes they forced me to drop the DVDs going to the online plan of $9 a month or whatever it is.

I am saving about $8 a month. If this is true for many other costumers how much money did they lose with all their stupid changes? To top it off now people are leaving because of all the bs and instability.

Only reason I am still subbed is due to me catching up on the stargate series, once I am done with all 3 series I will drop my sub since I have nothing else to watch. The streaming options seem to have gotten alot worse and dvds werent that great to begin with. This is all about greed and never about them being able to afford it. Right now the only way to save this sinking ship is for them to revert back the changes and credit the accounts of those who paid for the new plan.

What's the point of having a streaming plan? If I feel like watching a 20 year old B movie, maybe then I'll sign back up for the streaming service. Whole point to get DVDs was where I can watch new releases. Now I'm just watching them through Amazon. Great business model Netflix, you stupid asses.

For $8.00 bucks a month I love netflix. Sure they don't always have the best of the best for movies but they have a lot of content. Documentaries are great. Tv series that I never watched when they were "live" I have been picking up.
It's a great service and even with the bumps in the road they have been experiencing I really feel that they will only get better.

I'm keeping my Netflix streaming account. Why? It's easy. I can fire it up and watch something cool whenever I want, during the limited time I have to actually hold the couch down. Right now I'm having my own personal Great Battlestar Galactica Rewatch, all in glorious HD thanks to Netflix. I ain't complainin'.

Tried it for the free month a while ago, then just went back to the "free alternatives". Why would I pay for something when there is a "free alternative" that is 1000x better and has 1000x more content that is available on the day of release, if not sooner?!?!? If these companies want to combat piracy, they have to make it BETTER than the "free alternatives", not much, much worse and expect people to pay for it. It's almost as if they DON'T want people to stop pirating, the way they are going about this. It's absurd.

Not only the underlying problems with Netflix but the market has taken a turn for the worst and it wont get better for awhile in the states. As for every other country its not a severe or bad.

The real problem are the stupid content restrictions that publishers put on streaming services like Netflix. I would gladly play the higher Netflix price if I could stream new DVD releases the day they come out instead of months afterwards. But that will never happen.

At some point, you just finish their unbelievably small database of decent movies. Sure, they can entertain you with millions of other series and movies that do not match your taste, but that's not the point.

I was going to leave, but ended up staying because in the long run it is a better value than digital cable and while the streaming isn't the best quality, it has many good selections. I think vudu has an awesomely good service just too pricy. Amazon is good but isn't in my blu-ray player, so more difficult to make use of it. So for now Netflix works well still with having both plans.

Which is precisely *why* Netflix subs are jumping ship - there's no advantage any longer compared to existing services/providers. It's like comparing DVRs from cable companies to a Tivo - it's not that you own it (as opposed to leasing it), but the value-add that is the Tivo services (which you pay extra for atop the equipment cost). I barely use Comcast's i-Guide (not that it's bad), so why would I pay extra for something I would barely, if ever, use?), and don't watch *any* VOD beyond the free VOD (so a DVR, from anybody, would be a non-starter - nothing against Tivo).

when we had netflix, felt underwhelmed by it... content for streaming just wasn't there, and from what I can tell it's still not there going by what people say about it... DVD rental wasn't bad though

I felt the same way about the service. DVDs were good although for the hassle might as well just use redbox for when I want to see something in particular. It has been awhile since I've subscribed. I dunno, I may resubscribe. I really don't want to see them go completely under because I agree mostly with the model that they have if only they had more mainstream content for streaming.

I still am amazed that people can afford an iPhone or an Android service but they can not afford Netflix it makes me wonder which is more important enjoying movies and TV Series (even though Netflix streaming we know still fails to provide everything) or paying a monthly fee on a cell phone that is very expensive? I sometimes wonder what people mean when saying they can not afford something yet they still spend on things that there is no need for and yet they complain about over pricing Netflix. Not trying to be a dick but I am just curious understanding who is really at fault? The customer who can not control his or her debt or Netflix for supposedly being greedy and raising prices because Movie and TV studios wanting more.

It just shows that we the hard working American people will not stand for corporations getting over on us by jumping up prices when we can barely afford what we are paying. I am glad this is happening. It sends a message loud and clear that there is power in your money. Bank of America, Wells Fargo, Comcast and many other companies are next. The American people are getting tired of your greed.

JSYOUNG571 said,
It just shows that we the hard working American people will not stand for corporations getting over on us by jumping up prices when we can barely afford what we are paying. I am glad this is happening. It sends a message loud and clear that there is power in your money. Bank of America, Wells Fargo, Comcast and many other companies are next. The American people are getting tired of your greed.

The only problem with this logic is that when Netflix loses customers it helps the studios. Netflix loses bargaining leverage, and it allows other services that are either sponsored by or very close to the studios (Crackle, Hulu) to gain market from Netflix. The content owners want to either control the entire supply chain from production to distribution directly or indirectly, and they don't mind losing lots of money in the process.
Bottom line: Netflix is one of the only chances consumers have to legally make studios and Big Content change for the better.

JSYOUNG571 said,
It just shows that we the hard working American people will not stand for corporations getting over on us by jumping up prices when we can barely afford what we are paying.

Dude if you can "barely afford" netflix then you have other problems. If you're having a tough time prioritizing food over netflix then you might want to re-examine some of your life choices.

JSYOUNG571 said,
It sends a message loud and clear that there is power in your money.

The free market works? Say it aint so! Are you sure we shouldn't regulate them?

Mikee4fun said,
I left once they increased their price. I use HBO Go and other streaming apps. Netflix needs to drop their price.


You know that you are still paying for HBO by subscribing right? Just because you use HBO Go app does not mean it is free and only thing you are getting out of it whatever shows that HBO has that you will not get on Netflix stream as of now.

TsMkLg068426 said,


You know that you are still paying for HBO by subscribing right? Just because you use HBO Go app does not mean it is free and only thing you are getting out of it whatever shows that HBO has that you will not get on Netflix stream as of now.

Its a part of my Comcast package turbo, I was paying additional for Netflix on top of that. What part of my statement did I say free?

Astra.Xtreme said,
This stock is starting to look like a bargain. Hmmm...
Not yet. There are still too many unknowns in terms of their ability to acquire new content, associated licensing costs, and of course this huge blunder with price increases and the resulting mass exodus of subscribers. Personally it would have to come down a lot more before I'd consider it a "bargain". Too risky right now.

Netflix could have handled the situation differently... they had a streaming service for $8 and DVD+Streaming for like $11. they could have announced that they are introducing a new DVD only plan for $8 and people would be happy that they have options. Later after a month they just have to bump the price of DVD+Streaming... wouldn't have made a lot of people angry at least.... btw, I am going to cancel my sub by the end of this month.

The problem is if they don't raise prices they will go out of business. The contracts they had initially for content was much cheaper than they are now. Their pricing to get content from the big content producers is as much as 10x more expensive than their previous contracts were.

A 10 Million Dollar deal could be costing 100 million now. That might only be from 1 Content producer or limited section of content to stream. Netflix has to work deals with many content providers which can impact their cost of services tremendously and your wallet as well...

brink668 said,
The problem is if they don't raise prices they will go out of business. The contracts they had initially for content was much cheaper than they are now. Their pricing to get content from the big content producers is as much as 10x more expensive than their previous contracts were.

A 10 Million Dollar deal could be costing 100 million now. That might only be from 1 Content producer or limited section of content to stream. Netflix has to work deals with many content providers which can impact their cost of services tremendously and your wallet as well...

Then the big content providers shouldn't be suprised when people pirate their stuff. It's proven that if the price is right people will pay, but content providers are too greedy and narrow sighted to see the future!

DomZ said,

Then the big content providers shouldn't be suprised when people pirate their stuff. It's proven that if the price is right people will pay, but content providers are too greedy and narrow sighted to see the future!

The problem is that Netflix is caught in the middle, and everything is blaming them.

DomZ said,

Then the big content providers shouldn't be suprised when people pirate their stuff. It's proven that if the price is right people will pay, but content providers are too greedy and narrow sighted to see the future!

And it's proven that no matter how much they set prices, people will pirate anyway. For example idevice apps are so cheap yet people jailbreak their devices so they can download the apps for free. No matter how low the prices are, piracy will remain for a long time.

ozgeek said,

For example idevice apps are so cheap yet people jailbreak their devices so they can download the apps for free. No matter how low the prices are, piracy will remain for a long time.

I don't know anyone who's jailbroken to get free apps (which cost $ on the appstore). I know lots of people who jailbrake to get around apple's stupid limitations on apps and their general disrespect for users.

BigContent should move to a media-independent licensing model. If I pay $1 for a title I should be able to watch that title anywhere, anyhow, anytime - forever. Until then they will bleed to death any company like netflix in a manner eerily similar to Congresses relationship to the American people.