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U.S. subscriber predictions have been cut from 25 million to 24 million

Netflix has had a lot of troubles since it began making big changes to its service. It first increased the prices of its plans back in July, which outraged customers to the point of jamming Netflix's customer service phone lines.

To make matters worse, Starz decided not to renew its contract with the company because Netflix wouldn't make subscribers pay a premium price for Starz content. This means Netflix will lose Disney and Sony-related programming come February.

Now, Netflix is 
cutting its third-quarter forecast by 1 million U.S. subscribers, and has realized the full extent of customer wrath since raising plan prices by 60 percent as well as splitting DVD plans from streaming plans. 

"We know our decision to split our services has upset many of our subscribers, which we don't take lightly, but we believe the split will help us make our services better for subscribers and shareholders for years to come," said Netflix. 

The company is now predicting 24 million U.S. subscribers by the end of the third quarter, which has been reduced from a previous forecast of 25 million. Originally, Netflix predicted that 3 million subscribers would move to the DVD-only plan while 22 million would transfer to the streaming-only plan. Now, these predictions have fallen to 2.2 million DVD-only subscribers and 21.8 million streaming-only subscribers. 

"Clearly, if the third quarter is slipping, there's risk to the fourth quarter, as the year-ago period was a time when everything went right for Netflix," said Barton Crockett, a Lazard Capital analyst.

Despite the cuts in U.S. subscriber predictions, Netflix has maintained its third-quarter financial forecast and international subscriber outlook. 

Netflix has said that it needed to raise prices in order to 
afford the hundreds of millions of dollars it takes to purchase licensing rights from movie studios and television networks. These licenses help Netflix build its digital library. 

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Not as dire as the stock shows
By AssBall on 9/15/2011 2:02:20 PM , Rating: 2
22 million instant viewers is still 172 million income per month with ONLY licensing and servers as overhead.

That seems like a pretty good deal to me. I think their stock will rebound fine.

On a personal note, We dropped our DVD plan when they changed the pricing structure.

RE: Not as dire as the stock shows
By invidious on 9/15/2011 2:54:12 PM , Rating: 2
customer service, market research, advertising, lawyers?

RE: Not as dire as the stock shows
By Chernobyl68 on 9/15/2011 3:12:24 PM , Rating: 2

RE: Not as dire as the stock shows
By AssBall on 9/15/2011 4:17:51 PM , Rating: 2
An IT staff that makes 172 million a month to make sure the servers and network are up? Sounds awesome.

RE: Not as dire as the stock shows
By mcnabney on 9/15/2011 4:06:23 PM , Rating: 2
I am dropping the streaming portion instead.

24 items in my queue and only one can be streamed

Sure, there are always things to watch on streaming, but they only get what is CHEAP so they are unlikely to have what you WANT to watch.

By omnicronx on 9/15/2011 4:47:25 PM , Rating: 2
with ONLY licensing
You mean.. the most costly portion of their entire business?

"I'm an Internet expert too. It's all right to wire the industrial zone only, but there are many problems if other regions of the North are wired." -- North Korean Supreme Commander Kim Jong-il

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