Print 56 comment(s) - last by gmanthebrave.. on Sep 28 at 12:59 PM

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 Reclaimer77 on 9/15/2011 3:09:30 PM , Rating: 5
I really don't understand the Netflix hate on DailyTech. Can someone please explain this to me? I really honestly don't get it.

I was paying like $80 a month for cable TV, and the rates seem to go up like every year or so. Netflix saves me a ton of money, is more convenient, and I don't need a DVR to ensure I can watch what I want. Yes, it's true, Netflix doesn't have EVERYTHING IN THE WORLD available that's ever been put on video tape. Well I'm sorry, but that's just life. Netflix isn't Burger King, you can't have it your way all the time.

Those projections aren't even a million off, the author is making it seem like a collapse has taken place. 21.8 million people see the value of Netflix's streaming catalog, and I'm one of them. I'm very happy with Netflix, for less than $20 a month you would have to be an idiot to NOT be pleased.

So please help me out and explain to me what's so terrible about Netflix all of a sudden. Is everyone just getting wrapped up in Mick's typical biased sensationalized tone, or are people just THAT cynical? And if Netflix's streaming catalog is so poor, please point me to someone who offers a better service for the money.

RE: Seriously...
By TakinYourPoints on 9/15/2011 5:19:33 PM , Rating: 2
Sensationalistic editorial bias and DT go hand in hand

RE: Seriously...
By Hakuryu on 9/15/2011 5:40:39 PM , Rating: 2
People just love to complain.

When I first started Netflix, I honestly couldn't figure out how they could offer the service for $8. I can easily watch 30 movies a month, some very old and not popular films that would cost $2.99 each for one night of viewing On Demand (Time Warner).

So I figured a price increase was due, and if they do actually expand the instant viewing, then that increase would be well worth it. Dollar for dollar, Netflix is still incredibly cheap compared to anything.

RE: Seriously...
By JohnWPB on 9/15/2011 5:49:02 PM , Rating: 2
To use your word "Seriously", I agree 100%. If we were to lose Netflix, my wife might seriously lose me.

RE: Seriously...
By fredgiblet on 9/15/2011 7:10:26 PM , Rating: 5
I really don't understand the Netflix hate on DailyTech. Can someone please explain this to me? I really honestly don't get it.

Insane levels of entitlement.

RE: Seriously...
By room200 on 9/15/2011 9:11:45 PM , Rating: 2
I find you confusing; YOU are one of the main posters here who always says things like "vote with your dollars", "go elsewhere if you don't like it". This is what people like me have done, and THAT pisses you off? or have I misread you. No bitching, no moaning; I just cancelled and haven't looked back and I don't miss Netflix. I didn't think it was worth the price increase, so I cancelled. Netflix doesn't own me, and I'm TRULY not concerned about their licensing fees. That's for them and their providers to work out. When I'm paying my bills, I certainly don't think Netflix is saying "You know, it's a probably not a good idea to raise prices in this economy; it hurts consumers."

The providers aren't stupid and they know that no other Netflix type service is available; they have to sell to someone. It's not about Netflix not making money; they have decided they want to make much BIGGER money, and decided to pass the cost on to me. Idecided I didn't want to play the game. No hate. No arguments. No harm. No foul.

RE: Seriously...
By nycromes on 9/15/2011 10:15:55 PM , Rating: 2
Well, I can understand if you were replacing your TV/Cable service with netflix, its a great deal. I on the other hand cannot replace my TV service with netflix (it wouldn't go over well in my house) so I'm paying for both. I didn't mind paying the pre-increase prices, but now, I just can't quite justify paying more for the same or less content in the near future.

Netflix really went about this in the wrong way in my opinion. They wanted to force people to stream by increasing prices at the same time as ISPs are capping connections. Not to mention the Starz thing, yeah, they really did get the short end of the stick. I wouldn't have minded a few dollars more, but my bill almost doubled. Bottom line, Netflix is cheap TV if it is now your primary delivery method, but for those who still have other TV service in their house, its an unnecessary expense. Gradual price increases would have helped, more content would have helped with the price increase, but what users got was a higher price with no real difference in service. You tell me why there is so much hate.

RE: Seriously...
By wempa on 9/16/2011 1:08:23 PM , Rating: 2
Excellent post. No need for people to start criticizing/insulting others. I don't currently subscribe to Netflix, but I could definitely see the value of Netflix only or Netflix plus a very basic TV package. Ideally, I'd eventually like to go to a Netflix-type service plus just an antenna for over-the-air TV. I just don't see the value of these big cable TV packages where 90% of the channels carry junk. You're also right about the timing of the price increase. It would be a different story if they combined the increased cost with better content. I'm sure a lot of people wouldn't even mind paying double the cost if the streaming content was greatly improved.

"You can bet that Sony built a long-term business plan about being successful in Japan and that business plan is crumbling." -- Peter Moore, 24 hours before his Microsoft resignation

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