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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%)

#21

Post by pork »

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 feel bad for them too, but it's important to remember that if they don't work for the customer, then they're not a viable business. No sympathy necessary.

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

#22

Post by JohnTHaller »

goodweeds wrote: post #18
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…

Of course, you don't really 'own' the movies through iTunes or Amazon either. And Netflix's stream servers have plenty of bandwidth to serve up. I use it daily without issue and HD programs, so it's not the servers. More likely, it you're internet connection or their overburdened peer connection to Netflix's peer. Either way, not something really in their control. As most internet service is getting more unreliable (instead of less), this isn't that surprising.

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

#23

Post by muhfuhkuh »

james33 wrote: post #2

Wasn't Reed Hastings named CEO of the year last year? $300 to <$90 in around 4 months. Hmmmm....

To be absolutely fair, though, NFLX should in no way, shape, or form be worth anywhere near $300 a share. Even $50 is pushing it.

I'd think settling somewhere between 30-40/shr. is a good premium. They have to have multiple pipelines of revenue aside from "streaming non-recent movies and tv shows."

Here's a strategy they can try: If they can score some day-after-airing TV shows a la Hulu and have them available for 30 days, then moratorium to let the studios "monetize" the episodes in reruns and in syndication, then "re-release" them in streaming the entire season, that will be something. They can angle it to subscribers as their own personal "Tivo". They can pay content owners per viewing, as Spotify does with music publishers.

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

#24

Post by JohnTHaller »

paul9290 wrote: post #17
martythemaniak wrote: post #8

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

The B-grade content they started to put front and center lost me. I just use hulu.com and other similar sites; Mac Mini connected to my TV.

You kind of have to do that to make Hulu and similar sites actually work in the living room due to the ridiculous licensing restrictions on a lot of their content disallowing phone/Xbox/360/Wii/set top box usage.

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

#26

Post by HaloZero »

I have friends who were outraged at Netflix price increase. And I mean serious outrage.

I did notice that the ones who were really outraged are running tight on money. One of them works and goes to school full time so an extra $8/month after tuition, rent, even though it's marginal seems like a LOT and for no additional benefit.

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

#27

Post by dr_ »

Hastings should have stayed the course with his decision. Can't just impulsively react to every analysts opinion and run your company that way. Raise prices as needed, you will lose subscribers in the short run but in the longer run you will hopefully keep providing better content and will then start gaining subscribers. They also maybe should have made a play for Hulu.

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

#28

Post by baddox »

singer wrote: post #13
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.

I'm guessing that's most of it: people with disposable income that were paying but not using, simply because they never bothered to cancel. All the news about the price hikes brought the small monthly expense to the attention of these people, and even though most could afford the higher price, it was just the nudge they needed to cancel a service they rarely use.

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

#29

Post by theoj »

paul9290 wrote: post #17
martythemaniak wrote: post #8

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

The B-grade content they started to put front and center lost me. I just use hulu.com and other similar sites; Mac Mini connected to my TV.

Agree, it does feel like there is a lot of B-grade stuff on Netflix streaming.

Paradoxically, the unlimited movie buffet might be their undoing. There is a limited number of movies that are truly excellent and worth watching. Once you go through those good ones, you're left with the crap. Having unlimited watching quickly moves you from the good stuff to the crap, and then you cancel your subscription. Neflix faces a scarcity disconnect: its unlimited model says there is no scarcity but out in the real world good movies are still scarce.

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

#30

Post by invertd »

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…

The users balk because they understand that their effective monthly/weekly price was jacked up, by a lot. Regardless of how much Netflix pitches their "unlimited" plan, users understand that their time for (movie) entertainment is not unlimited. Therefore, from their perspective, they see it as it is - a huge price increase - and they move on to better deals or something else entirely.
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