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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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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.

"So, I think the same thing of the music industry. They can't say that they're losing money, you know what I'm saying. They just probably don't have the same surplus that they had." -- Wu-Tang Clan founder RZA

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