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Old September 17 2011, 01:07 AM   #245
Stone_Cold_Sisko
Vice Admiral
 
Re: Netflix shoots itself in the foot... aka no more free streaming

Snaploud wrote: View Post
Ar-Pharazon wrote: View Post
New article on Yahoo.

The gist is, Netflix has lost 600,000 customers since June. Apparently far more than they had anticipated.
From the link:

Even with fewer subscribers, Netflix expects to bring in $10 million to $25 million more from its customers than during the July-September period than it did April-June.
24.6 million in June. That prediction was lowered Thursday to 24 million.
So, their subscriber base dropped by less than 2.5%, and their revenue increased by between $10 and $15 million. I've got to say: that really doesn't sound all that bad for such a major pricing change.
Except for the fact that their loss of customers were worse than they projected, for which the end result was a sizeable drop in their stock - the perils of being a public company. One article said 20% (!). If you calculate the $$$$ value of that 20% drop.... it's kind of eye opening. Also as I understand it the price increases happened late in the quarter so the entire quarter's numbers aren't representative.

edit: from temis' article above, which puts a dollar value on the stock drop...

After watching its stock fall 19% yesterday following the disclosure that it was losing subscribers for the first time in years, the online video and DVD-by-mail company's shares took another beating Friday, dropping an additional 8%.
In total, Netflix has lost 26% of its value, or about $2.8 billion in market capitalization, over the last two days.
After announcing a controversial price increase in August, Netflix had told investors to expect that it would gain 400,000 subscribers in the current quarter. Instead, chief executive Reed Hastings said yesterday that it expected to lose 600,000 by Sept. 30.
So, is +$15 million (some of which was made before the price increases) worth -$2.8 BILLION in value?

I'm still getting over Netflix's prediction that they would be +400,000 after their price increases. Really now? That's arrogance. I thought everybody understood and expected some level of subscriber drop, whether minor or major, with the expectation that the increased rates would cover the loss... Telling your investors you're going up 400k... then instead losing 600k... customers speak indeed.

Last edited by Stone_Cold_Sisko; September 17 2011 at 01:23 AM.
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