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Netflix loses 800,000 subscribers (stock drops 28%)

money.cnn.com

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Re: Netflix loses 800,000 subscribers (stock drops 28%)

#11

Post by badclient »

gkoberger wrote: post #3

I feel bad for Netflix. They're between a rock and a hard place. The content providers want more money and eventually want to cut out the middleman. The users balk when the price is raised, even though unlimited streaming and DVDs for a month still cost less than a decent meal. And every decision they make (like Qwikster, which was likely done so they didn't have to pay content providers a fee for users who weren't s…

still cost less than a decent meal

So many great things on the web cost less than a single cup of Starbucks. Yet, I myself am so hesitant to pay for them.

On my landing pages I design at work, I'm increasingly trying to communicate this via comparisons("less than a morning Starbucks trip"). Another one is showing a dollar bill to communicate that for less than a dollar a day, they will get _____.

For a service that we were charging $10, we had 3% conversion rate.

Then I showed an actual picture of a $10 bill to show how inexpensive this is and we doubled conversion to 6%.

I increased the price to $30 and showed a one dollar bill, an equal sign, and what they would get for a dollar a day. The conversion rate is 3%. Overall, we make $30 more per 100 uniques to that page than at $10 price(we make $60 at 10, $90 at 30).

It seems promising though not totally conclusive in terms of increasing conversion rates. The point is, spending a dollar on the web to me seems much more difficult than spending a buck on a Crunch bar. The efforts of my landing page experiments are to align online spend perception with retail.

(numbers rounded to nearest % for purpose of this post)

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#12

Post by mark_l_watson »

So, they lost 3 to 4% of their customers - that is not good.

That said, my wife and I each have our own streaming accounts and I also have blu-ray delivery on my account, and Netflix is not losing our business: we really like the service.

Also, with their price increases, I don't understand why the stock took such a big hit.

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#13

Post by singer »

martythemaniak wrote: post #8

Honestly curious, where did those users go? Back to $40 shitcable? Torrenting?

If they are like me, they didn't use Netflix much and it just became an unnecessary expense. For those who use Netflix on a daily basis, I think the new price is still fair.

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#14

Post by jdludlow »

agildehaus wrote: post #5

Poor site redesign followed by a price hike followed by a pointless attempt at splitting up the company. Not surprised.

The price hike didn't bother me. The company split would be annoying, but not the end of the world. It's the terrible UI design of the new site that has me looking for alternatives.

It's so bad. Do they actually think that this UI is functional, or is there some kind of internal fear to question it?

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#15

Post by phallstrom »

martythemaniak wrote: post #8

Honestly curious, where did those users go? Back to $40 shitcable? Torrenting?

We had the 1 dvd at a time (+ blu ray option). So, for us the price jump was close to double. Our last DVD sat on the shelf for 3 months before we got to it. But we watch streaming a lot. So we canceled the DVD option and figure that $8-9/mo we'll use at the redbox near us if there's something recent we want to watch. That's more movies than we can watch anyway (or that we can get via netflix with the mail delay)... I'm sure a lot of the 800,000 were like us.

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#18

Post by goodweeds »

martythemaniak wrote: post #8

Honestly curious, where did those users go? Back to $40 shitcable? Torrenting?

I'm willing to bet that a lot of those users, like myself, said "I've had these same 2 dvds for the past year. The streaming selection pretty much sucks and I end up watching B-movies when I'm bored because nothing I want to watch, and haven't seen before, is in their library. I should send these 2 dvds back and cancel".

I've long switched to itunes or Amazon when I want to watch movies because they tend to have the movie I want, when I want it, and I can download the whole movie before watching, thus not having to deal with netflix's lag-burdend craptastic streaming service.

Re: Netflix loses 800,000 subscribers (stock drops 28%)

#19

Post by randall »

gkoberger wrote: post #3

I feel bad for Netflix. They're between a rock and a hard place. The content providers want more money and eventually want to cut out the middleman. The users balk when the price is raised, even though unlimited streaming and DVDs for a month still cost less than a decent meal. And every decision they make (like Qwikster, which was likely done so they didn't have to pay content providers a fee for users who weren't s…

I think it's because the lack of tangibility (in any real sense) makes it seem less valuable. I had an experience where I said "pay $7000 for my service with a computer included" or "pay $5000 and byoc" and i've so far had everyone choose the $7000 option. It's just a matter of connection / tangibility. You know what starbucks tastes like, so you're willing to pay. You know what an iPhone feels like, so you can buy it. The software, while awesome, doesn't connect like a physical product you can connect with on multiple senses.

My $.02, but I think it's why it's easier to buy a big mac than Rdio.

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