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  (Source: blogspot.com)
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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RE: Seriously...
By Hiawa23 on 9/15/2011 2:39:20 PM , Rating: 3
I had the 2 out DVD/bluray, plus streamin, before the hike which was $17.99. My rate would increase to $23.98, so I canceled the streamin portion as if I want to see any of the movies I will just rent the disc copy, so my monthly fee is $14.99. I rarely used streamin, & if Netflix wants us to get us off the physical copy rental then make it so all movies, new release included, & old are available & in HD.

I really did not care much for the Starz content, so I am fine with Bluray/DVD rental only. The movies get to me the next day, & with fast return, I can easily go through 6 movies a week, so mulitply that by 4 weeks a month, no car wear & tear, Netflix is still the best service for me.

In this tough economy, I guess Netflix thought everyone would just blindly pay & be happy. Guess not..


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