Comments about ‘Is Netflix in a death spiral?’

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Published: Friday, Sept. 16 2011 8:00 a.m. MDT

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Salt Lake City, UT

'Despite the guidance revision, we remain convinced that the splitting of our services was the right long-term strategic choice.' - Article

A 19% stock drop in light of a 60% rate increase shows this is not the case.

This shows the vast disconnect between business...

and the average person.

Farmington, UT

I killed my subscription when I got my e-mail announcing the change. I can't understand why they would do it thinking it was a good way to increase revenues. Maybe they can't continue to be profitible under the old subscription tier and that's fine. I thought the way you could stream unlimited movies from any computer, even my iPhone or my Wii, for about $10 a month seemed a little too good to be true anyway. Turns out it was, I guess.

Murray, UT

It sill beats the price of cable. Streaming Netflix and Hulu Plus for $16.00 a month is a steal compared to cable prices. If you want to stream HD Movies then sign up for Vudu. Still beats cable out by a long shot.

Last Stand
Farmington, UT

If Netflix had 24.6 million subscribers at the end of June under the old pricing structure then an increase of 60% in subscription fees and only a loss of 0.6 million subscribers between July, August and September would still be an impressive increase in revenue. If the avg. subscription at the end of June was $10 then Netflix would see an increase of revenue from 246 million a month to 384 million per month. That's pretty dang good. But of course that revenue increase was already built into the stock price before Netflix' announcement today and since the stock market always looks to future growth potential, any downgrade in projections is going to cause a kneejerk reaction in market trading. I'm sure stockholders are worried about the ability to reatin, let alone grow, its subscriber base and increase revenues but the fact that Netflix will only lose 0.6 million subsribers in three months after making their unprecendented, and what I thought to be a ridiculous, increase in pricing probably bodes will for them in the future.

Herriman, UT

The problem is that there is a very small # of opportunities to purchase content for streaming. Even if Netflix is willing to pay much more than they have in the past, the studios are simply not willing to sell it to them.

Netflix jumped the gun big time - they needed to secure the content rights FIRST and then determine if the split subscription was viable.

In the past year, we've used the streaming to find mainly past TV shows. The streaming offerings are spotty - you go online and check the new releases and 99% of options are low class, straight to home video movies. You could tolerate the weak streaming when you also got the discs by mail, but without them being bundled, nobody will find the streaming worthwhile (especially when the Disney TV shows are pulled after the Starz deal expires).

Roy, Utah

It wouldn't be a problem to split the service IF the streaming had all the movies. Instead its pretty sparse pickin's after a while.

Mikey B
West Jordan, UT

This is not a "vast disconnect between business... and the average person"... This all started after an announcement that many content providers were going to charge Netflix more to stream their content.

Since when has finding a profitable business model been a disconnect... Seems like people are just mad... to the point of personal offense at this. It's just bizarre how angry many people got about this.

If a service doesn't work for you. don't use it... People don't need to cry about it...

Salt Lake City, UT

'Since when has finding a profitable business model been a disconnect...' - Mikey B | 9:42 a.m. Sept. 16, 2011

Reply fact:

*'Mitt Romney as job creator clashes with Bain record of job cuts' - By Lisa Lerer, Bloomberg News - Published by DSNews - 07/20/11

'Employees who lost jobs at Bain-controlled companies more than a decade ago say they still hold Romney responsible.
"I would not vote for him for anything," said Phyllis Detro, 68, who lost her job...'

It is true, if you don't like it, don't use it.

AND, everyone has the freedom to 'cry about it.' Insulting people using their free speech is in poor taste.


Re: Last Stand

I was about to share the same points. Only 1 of 40 subscribers canceled their membership, while 39 of 40 are paying up to 60% more. It is unknown how many downgraded their plan to streaming-only, but ultimately Netflix stands to make a bundle. Once their quarterly profit numbers are announced, the stock will rebound.

Johnny Triumph
American Fork, UT

Their big mistake came in under pricing the commodity in the first place, presumably done to attract a very fast customer base increase. $10 for one dvd at a time and unlimited streaming was not supportable, ever, so an adjustment was needed...but it came at a time when they'll lose a few of those early customers.

However, the $7.99 streaming is still a great deal, but their increase for a DVD made it not compete with redbox. I dropped the dvd option and can rent locally whenever I want to; I'll certainly not rent 8 movies a month from redbox so I'm still saving by going that route.

Deep Space 9, Ut

To "giantfan | 9:09 a.m." you seem to have missed the articles where Netflix explained the jump in prices. Basically what happed was that the TV studios wanted to charge more for what they made avaiable to Netflix. Since Netfix's costs were going up, they had to charge more for their service.

Unfortunately there isn't another services that has as much streaming content available as Netflix.

Last Stand
Farmington, UT

Re: CheeseFries

I'm not privy to all the details and maybe Netflix has released the statistics but the loss of 0.6 million subscribers is a net result, as in total number of new subscribers minus those that they lost during the period. Let's suppose they lost 5%, or 1.2 million, of their subscribers because of the price increase. That means they gained .6 million new subscribers. Since their original forecast was for 25 million subscribers by the end of September, or an overall net increase of .4 million, then they either underestimated the number of subscribers that would cancel, and/or the number of new subscribers they'd be able to attract. If Netflix is comfortable that the negative effect the new pricing would have on current subscribers is over, then they can expect to see growth at the same rate of new subscribers as they saw last quarter, without the mass exodus of existing subscribers. The market would like to see bigger growth comparable to what Netflix has shown the last 4 quarters but that was probably not sustainable longterm anyway. If they are forced to pay more now for content, they should be able to remain competitive.

lost in DC
West Jordan, UT


this was a story about a video company. that's quite the creativity, turning it into a venue to express your hatred for romney

Farmington, UT


Yeah, that makes sense, and like I said it did seem a little too good to be true. And if the bulk of the increase is due to studios wanting a bigger piece of the pie, then Netflix should have no concerns of remaining competitive in the market place.

Salt Lake City, UT

'... turning it into a venue to express your hatred for romney.' - lost in DC | 11:29 a.m. Sept. 16, 2011

Mikey B simply asked me a question Lost.

'Since when has finding a profitable business model been a disconnect...' - Mikey B | 9:42 a.m. Sept. 16, 2011

I simply replied with a fact.

A story printed by...the DSNews.

Pointing out the disconnect between the profit goals of big business...
and the well being of people, is not 'hate.'

Shall I give other examples?

Goldman Sachs, etc, etc.

There is no shortage of the business bottom line harming the well being of people.

BP oil spill, 11 dead.

How strange that you claim I 'hate'...

when presented with...the facts of the matter.

Why is it conservatives always resort to hate...first?

Ogden, UT

It's not as much about what they offer or how much they SHOULD have charged. It's that they are following the crowd of other companies and hurting the general public when we are already being nickel and dimed to death. I am not a subscriber to Netflix, and I was wanting to. But I don't think I will simply because they have shown that the buck is far more important to them than a human.

They have abandoned their original high minded goals for quick profit and I want no part in it. Obviously anyone can see the business upside, but I also care a little bit about decency.

Durham, NC

Perhaps not a death spiral, but they surely will find out how elastic their demand really is. I did the math for my family... can you say "hello Redbox".

American Fork, UT

Everyone has different objectives, but I personally dropped my cable about 6 months ago and bought a ROKU box and was living on Netflix and Hulu. It was a royal pain and limited viewing of quality programs, but the price difference made it 'worth it' to me.
I'm one that dropped Netflix with the price increase. I've watched all the good documentaries on Netflix and I'm not sure if I've streamed a movie because of the poor quality of choices. We mostly had it to be background noise and something to entertain the kid's once in a while.
I actually kept the lowest dvd plan w/Netflix ($4.99/mo for 2 movies) because I do like to be able to get the dvd's I want, when I want. Redbox is convenient and cheap, but I can't always find what I want. I do love Netflix for their DVD choices (everything ever made basically), but the streaming is really marginal in my mind.
I put Direct TV back in my house last week. I definitely would not have switched, but the price spread didn't justify not having tv any longer for me.

South Jordan, UT

People are freaking out over the price increase. But what they'll realize shortly after they leave is that Netflix is still by far the best value in the market.

Heber City, UT

Pagan we have learned well from Liberals.

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