When Netflix announced that they’d be changing their subscription rates in July, the company expected some existing customers to be uneasy about it. What they probably didn’t expect was the widespread outrage expressed by customers, many of whom threatened to quit the service.
Now there’s this: Thanks to a lag in subscriptions, Netflix has been forced to revise the number of subscribers it expects to see by the end of September, decreasing that number by 1 million. Previously, the company said it expected 25 million subscribers by month’s end. That’s a 4% drop in subscribers.
In response to the news, Netflix’s stock price went down by 15% this morning, as was pointed out by GigaOm.
In July, Netflix announced that it would be getting rid of its $9.99 streaming/DVD combo package and instead split them into two offerings, each one costing $7.99. This change effectively increased the cost of their most popular plan by 60%, infuriating customers. Those changes went into effected at the beginning of this month.
Netflix CEO Reed Hastings said that he did expect revenues to take a hit for a quarter in response to the rate hike. Whether this is part of a quarterly bump in the road or the beginning of a subscriber exodus has yet to be seen.
This isn’t the only challenge faced by the company in recent weeks. Just as the new subscription plans came into effect, the company lost a major content licensing contract with Starz Entertainment, which may lead to a considerable dent in the service’s library of streamable content.
How do you feel about Netflix’s price hike? Are you likely to quit (or avoid) the service as a result of it? Let us know your thoughts in the comments.
