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Netflix stock plunges as subscribers quit

106 points by SHOwnsYou 15y ago

brianbreslin 15y ago
so if i read this correctly, 4% subscriber attrition, but they are jacking up prices like 60% right? still likely going to make more $...
- evilduck 15y ago
  That's if subscribers keep the same level of service. Their subscriber count could stay relatively flat while everyone drops disc delivery service and their revenue wouldn't change by +60%.
- dminor 15y ago
  Maybe. I'm sure a lot of people also downgraded but didn't quit completely. I know I did.
- Klinky 15y ago
  This is the first wave, I am sure there will probably be more people next month who see their credit card statement and wonder why their bill is twice as much.
wccrawford 15y ago
This reminded me that I hadn't used my account in a long time, so I cancelled it. I was greeted with: "Cancellation will be effective immediately - no refunds for partial months." ... That made me even more determined to get out of there. I can't believe they think I'll be back if they have that attitude.
- crenshaw 15y ago
  That's horrible. This article did also remind me to cancel my streaming (but now I'll wait until the end of the month ;-). I'm going the surprising route of doubling down on DVDs now.
  - wmf 15y ago
    I canceled streaming (and kept DVDs) the other day and it takes effect at the next billing cycle. If they don't want to offer refunds, they could at least make cancellation effective at the end of the already-paid-for month.
  - mechanical_fish 15y ago
    No surprise to me - I'd prefer the DVD route myself. The streaming service has a fraction of the content and is apparently destined to grow smaller, or more expensive, if the Starz news is any kind of bellwether. My fear now is that the golden age of rental DVDs will come to an end before I have finished enjoying it. I want to be able to watch older or obscurer films, and the disks are better for that, probably because they don't require me or the rental company to acquire and maintain a stupid never-ending oft-renegotiated contract with a movie studio and its lawyers.
    - hack_edu 15y ago
      While I doubt that the market for older and obscure DVD rentals is going anywhere, most of the titles you seek are likely available in your library system. Ordering them on (free) loan from nearby branches would take about as long as Netflix would to postal mail it.
- desigooner 15y ago
  That was the same mistake I made. I cancelled sometime at the beginning of last week. With a better part of the month ahead, it was very strange to see a message like that from Netflix (who have been very good in the past as far as customer service goes)
- dedicated 15y ago
  When was the last time they gave partial refunds? I think this was the case even years ago. I agree with the tone of the wording though; it has that passive aggressiveness that we paying customers shouldn't have to endure.
- parfe 15y ago
  >Please note: > Return outstanding DVDs within 7 days of cancelling to avoid charges to your credit card. > Cancellation will be effective immediately - no refunds for partial months. > Instant streaming on your computer or via any Netflix ready device will no longer be available. I also went to cancel but Netflix placed the "No partial months" stipulation as the second sentence on the page. They did not bury the terms and they did nothing underhanded as your post implies.
  - deleted 15y ago
    [deleted]
r00fus 15y ago
I never understood why Netflix effectively divorced their two major offerings. At one point, it made sense to carry the DVD subscription even if you're primarily a streaming customer. However, as they currently structure it, these two services (DVD vs. streaming) could be separate companies and now almost compete for the same dollars. Also I wonder if the loss of Starz is a bigger impact to their stock price than the lack of subscriber growth.
- timdorr 15y ago
  Their Starz content doesn't run out until February of next year, so it won't have a real impact on subscribers until then.
  - r00fus 15y ago
    Yeah, but it could affect stock price today. Stock valuation is inherently forward-looking.
  - garethsprice 15y ago
    Not so sure about that, they just split the offerings which is already causing a lot of users to evaluate their subscriptions, hearing about the ending of the Starz contract will affect that decision. I love the concept and want to support the company, but I feel like the value of their offering just dropped drastically (I lost the DVDs by mail, so down to half the content, then losing Starz means that I'm essentially getting 1/4 of the content - if that - for the same price). Previously we just let the subscription get charged, even if we had a busy month and didn't watch anything, but I feel like if I'm going to have to go to that "Change Account" screen then "Cancel" is going to be the most appealing option. Netflix needs to do a better job of engaging it's customers and explaining the reasons behind the price hikes, and offering an incentive to stay - even if it's "hey, the studios are screwing us, please stick by us and be part of ending that messed-up system".
- deleted 15y ago
  [deleted]
- pkteison 15y ago
funkah 15y ago
I have a feeling that this could just be a blip on the radar and Netflix's business is actually OK long-term, but I am one of the people who quit when they announced the price hike. Not because I didn't want to pay more, but because it was the last straw of me realizing I wasn't getting much value for my money in the first place. Their instant streaming service never had what I wanted to watch, and I'm no longer willing to deal with the two-day turnaround time for the DVDs. (I'm not proud of that last fact, BTW.)
- pork 15y ago
  > I'm no longer willing to deal with the two-day turnaround time for the DVDs. (I'm not proud of that last fact, BTW.) I don't see why that's unreasonable -- they've had instant viewing for quite some time now, but the online collection has been woefully lacking for an equally long amount of time. It's very reasonable not to be satisfied with the 2 day turnaround time on good stuff, when thousands of B-movies are available instantly. If they hadn't introduced all 7 seasons of TNG, I would have quit too.
  - veyron 15y ago
    I feel ashamed for having to ask, but what's TNG?
    - ubercore 15y ago
      Star Trek, The Next Generation.
    - pkdevil 15y ago
      The Next Generation (Star Trek)
    - deleted 15y ago
      [deleted]
  - Florin_Andrei 15y ago
    > If they hadn't introduced all 7 seasons of TNG Thanks for the heads-up, I didn't know that.
dendory 15y ago
I think there's a lot of overreacting. Personally, I don't really see any alternative to Netflix, even though their selection sucks here. I don't have cable so no option there. Hulu isn't available in Canada, most websites like NBC or ComedyCentral don't allow us to view either. Amazon rentals or buying is so much more expensive, I'd get a handful of movies for the same price as unlimited Netflix. So again, who gives a better deal than Netflix?
- lgbr 15y ago
  In the US, Amazon Prime offers free streaming very similar to Netflix. It comes with your regular Amazon Prime membership that gives you free two day shipping on everything. The selection is obviously not nearly as thorough as Netflix (which from what I hear is poor to begin with), but I have few doubts about Amazon's ability to catch up.
- ubercore 15y ago
  Free streaming of certain movies/TV shows on Amazon with a Prime membership is arguably a better value. Selection seems to be mostly the same as Netflix, though device penetration is far more shallow. Still works on my Roku, though.
  - pkamb 15y ago
    No Xbox 360 app.
  - tsycho 15y ago
    IMHO, Amazon's free collection that comes with a Prime membership is quite horrible. Or maybe you like different stuff than me. And their interface on Roku is even worse - ugly, long lists of movies with no way to search or skip through the list - all seasons for a series (I think Doctor Who has some 20+ seasons there) are placed in the above list as individual shows (rather than being grouped together), and are not even in chronological order Netflix's interface on Roku is a godsend in comparison.
    - ubercore 15y ago
pkteison 15y ago
I think it's weird that wall street responds to customer numbers going down, rather than the announcement that their costs were going up by an order of magnitude. "One analyst predicts that Netflix's streaming content licensing costs will rise from $180 million in 2010 to a whopping $1.98 billion in 2012." - Netflix needing to reprice to deal with that change is -why- people are quitting, and it's been a known problem for several months now, so why did the stock drop wait?
- veyron 15y ago
  There's lots of talk about customers leaving now. That's known, and that's occurring now. Rising costs are in the horizon, and it's not known if Netflix can leverage its position to strongarm a better content licensing deal.
vaksel 15y ago
the problem with Netflix is that over the past year they started offering less and less content on Instant Streaming(what most people tended to use). And the content they do have left is subpar at best. Sure there are a few good shows....but overwhelmingly anything popular is not available.
- aaronbrethorst 15y ago
  I'd disagree with you, but I'm too busy watching Mad Men and Breaking Bad on Netflix right now.
  - brndnhy 15y ago
    That's a lot easier when you're a year or more behind following a television series.
    - aaronbrethorst 15y ago
      Netflix Streaming is the only way I consume TV, so yeah, I'm definitely at least a year or more behind :)
- dcosson 15y ago
  I don't know if I'd go that far, I still manage to find interesting things to watch on a regular basis. That said, I would happily pay 2 or 3x more if all of their dvd selection was available on instant (of course, I have no idea if that's feasible for them or if it would cost me more like 10x more for what the studios would charge)
- bostonvaulter2 15y ago
  I think you mean anything currently popular.
- MaxGabriel 15y ago
  Before my family cancelled netflix, my major problem wasn't that there was no content that I enjoyed, but that I had no way of finding that content. Their ratings system was really unreliable for me, so finding quality was difficult. On the other hand, when I heard about films by word of mouth, and found them on Netflix, I really ended up enjoying them. I always found that Dish Network had a really reliable content rating system--it was an objective star system not based on user preferences. Some combination of this with tailoring to individual users might be the best fit for Netflix--it would help users find content, but it would also provide an objective measure that lets me validate the 'users like me' rating system the use now. If Netflix had a better algorithm/system for helping find content, and a dash of Hipmunk UI, then I'd still be a customer.
sudonim 15y ago
Fewer subscribers = lower revenues. <- That's the problem. Fewer subscribers = More articles about fewer subscribers = FUD = Lower stock price <- Not the problem. The movement of the stock price doesn't affect Netflix' viability as a business. Kudos to them for making the business more targeted towards online streaming. I hated having to pay for physical DVDs when all I used was streaming. I switched my plan as soon as I could. I don't use Netflix all the time. For most shows, I auto-steal them after they air. For casual watching, I use Netflix and watch things like Pawn Stars, Trailer Park Boys, and other series long after they've aired. It fills the "I just want to flip on the TV and see something I wasn't expecting. I don't care what it is" need.
- maratd 15y ago
  > Fewer subscribers = lower revenues. <- That's the problem. That's not the problem. In fact, it might be the solution. What matters is profitability, not revenue.
  - pchristensen 15y ago
    They have large fixed costs for content. Subscriber growth amortizes those costs across a wider base.
    - sounds 15y ago
      Although that's a fair first-order approximation, look here: http://files.shareholder.com/downloads/NFLX/1403529688x0x500395/7c72e777-75c5-4f7f-9640-5b06f8cc54e4/Guidance_Update_Sept_2011_final.pdf http://files.shareholder.com/downloads/NFLX/1403529688x0x500... I'd break their costs down into per-byte costs and per-subscriber costs. The fixed content costs are only fixed until they renegotiate their contracts. Most media businesses look to merge with the content creators to eliminate those costs altogether. I believe the real discussion going on is whether Netflix has a viable long-term business model. I believe they do, and I'm glad they got rid of DVDs.
- jellicle 15y ago
  Has anyone actually done the math here: 25 million customers at $10/month was the old calculus; 24 million customers at $16/month is the new calculus; I don't see any problem here. At all. (Okay, I'm handwaving because I'm too lazy to actually look up the revenue figures, but losing subscribers when you raise your prices is not necessarily a bad thing at all.)
fuzzythinker 15y ago
PE is still 43+. Their subscription rate change only speeds up the inevitable realization of their stock being way over valued. Unless they have some plan that takes them to another level, their stock would have to come back down to earth sooner or later.
cletus 15y ago
The idea that people are quitting now because of theoretical price hikes in two years is... ludicrous. Remember that Netflix is month-to-month. People will leave when they no longer get value from it now. Netflix movie selection doesn't seem to be great. In my case I subscribe to it for the TV shows more than anything else and for $8/month, the cost is easy to justify. YMMV. I see Netflix's problem as this: - Hollywood increasingly sees Netflix as a problem rather than an additional avenue for revenue. The studios may be concerned about creating another iTunes (virtual monopoly); - Studios and distributors increasingly want to go on their own, which is really bad for consumers and seems to be driven by simple greed of cutting out the middleman without realizing what that middleman is actually doing for you; - Netflix uses Amazon for scale. This is a problem. As much as burst architectures have theoretical advantages, the costs just don't add up beyond a certain size. I cannot believe that Netflix isn't at the point where they'd be better off owning their own servers; - There's no offline viewing. IMHO Apple will increasingly address this market. Netflix needs to as well. When people are mobile they usually don't have a sufficient data connection, particularly if on a train or plane. Netflix seems to want to go the HBO route of creating original content. This is an incredibly dangerous game to play with them forking out big bucks [1]. At least AMC's content in comparison is relatively cheap to produce and they have a relatively stable income due to cable bundling (although they're struggling with rising costs of Mad Men). EDIT: Let me clarify. 2012 price hikes don't drive consumers. Current value and current price hikes drive consumer behaviour. The recent price hike in DVD+streaming will no doubt have caused some to drop the service. They could drop either streaming or DVD or possibly both. I'm inclined to believe that DVD is an ever-smaller piece of their business but it may yet be significant to have a real impact on subscriber counts (in terms of subscriber loss). [1]: http://www.reuters.com/article/2011/03/21/idUS176332428720110321 http://www.reuters.com/article/2011/03/21/idUS17633242872011...
- timr 15y ago
  "The idea that people are quitting now because of theoretical price hikes in two years is... ludicrous." It's not a theoretical price hike in two years. My bill goes up at the end of this month.
- unexpected 15y ago
ZipCordManiac 15y ago
The movie companies are just shooting themselves in the foot. If I can't find it on Netflix or download a copy for a reasonable price (I'd pay a couple bucks to download a movie and have permanent copy...), I'll torrent it. Their loss.
- MatthewPhillips 15y ago
  You're not their target customer.
  - ZipCordManiac 15y ago
    I am a HUGE media consumer, trendsetter, and generally on the bleeding edge of entertainment in my group of friends. I am their EXACT target, they just don't know how to market to me. I am the one telling my friends about new movies and tech, making sure they see what is good. I would without a doubt spend much MUCH more money then your average consumer if they made it available at reasonable speeds in a DRM-free format. (xVid, MP4, Mkv) I want to pay, and support the artists, and 'own' the material to move around on my own computers. The studios however won't let me unless I purchase physical content and do the rips myself. So most of the time I only up getting the blu-ray months down the road if it's something special. The only person who 'wins' in this situation is me, and I wish this weren't the case.
  - archangel_one 15y ago
    And over time, they are going to end up with fewer and fewer target customers if they keep this up.
  - angrycoder 15y ago
    People who want to consume media and are willing to pay money for easy access to it aren't their target market?
    - MatthewPhillips 15y ago
      People who are only willing to pay half of the market rate are not their target customer.
ilamont 15y ago
I wouldn't underestimate Netflix. Their business model and viability has been doubted by Wall Street and others for years (see http://www.usatoday.com/money/media/2004-10-17-netflix-dvd-war_x.htm http://www.usatoday.com/money/media/2004-10-17-netflix-dvd-w... and http://www.fool.com/investing/general/2007/12/27/will-apple-kill-netflix.aspx http://www.fool.com/investing/general/2007/12/27/will-apple-...) but the company has always been very clever with their product strategy and partnerships. As for the drop in subscriber numbers, it's understandable that people don't like price hikes, but losing less-profitable DVD customers may not be a bad thing in the long run. Postage and regional distribution centers are a drag on the company. Reducing those costs frees up funds for content distribution deals.
- sp332 15y ago
  I think CNN is being hyperbolic because Time Warner (CNN's parent company) sees them as a threat.
  - invisiblefunnel 15y ago
    Isn't Turner Broadcasting (http://www.turner.com/ http://www.turner.com/) the parent of CNN? Or am I missing some information?
    - sp332 15y ago
      I think the news program is part of Turner Broadcasting System, but the organization is owned by Time Warner. But I only know this from Wikipedia. https://secure.wikimedia.org/wikipedia/en/wiki/CNN https://secure.wikimedia.org/wikipedia/en/wiki/CNN
    - mikeryan 15y ago
      Turner is an "autonomous" subsidiary of Time Warner.
- seanalltogether 15y ago
  A lot of people seem to think that the recent price changes are done to discourage dvd rentals because they are less profitable. I see it the other way, the recent separation in prices were done to isolate dvd profits from the rest of netflix. Make no mistake that the studios are already working on deals that will bleed netflix dry. They will look to squeeze every last penny of profit out of the streaming division. By separating the 2 units, netflix is making sure the dvd unit can chug along merrily with their relatively fixed profits that the studios can't bargain for.
18pfsmt 15y ago
I agree with some of what you've written, but I have a few nitpicks from the interviews with their CEO that I've seen, > Hollywood increasingly sees Netflix as a problem rather than an additional avenue for revenue. The studios may be concerned about creating another iTunes (virtual monopoly) I think they see the NFLX subscriber numbers and are simply looking to get a bigger cut >There's no offline viewing. IMHO Apple will increasingly address this market. Netflix needs to as well. When people are mobile they usually don't have a sufficient data connection, particularly if on a train or plane. I don't believe that is how NFLX perceives itself. They seem to understand their market is a niche, and they don't see themselves as the place to go for the latest TV episodes, for example. >Netflix seems to want to go the HBO route of creating original content. I believe they see their ability to directly negotiate with studios (i.e. content creators) as a major source of leverage when dealing with the content owners moving forward. Edit: Fixed horrible formatting. This was a response to cletus that got interrupted by a minor office fire drill :(
kin 15y ago
If it were up to Netflix they would give customers the content they want for the price that they want. Hollywood obviously wasn't going to let this slide and I fear streaming services will soon hike to cable-like prices. Also, people paid for separate Netflix accounts because they each wanted their own accounts for DVDs. Now that Netflix upped their device count to a whopping 50 and split DVDs and Streams, I wouldn't be surprised if everyone went Stream only and shared their account with 10 other friends. That's certainly what I'm doing. As for DVD's? Well, piracy has become what's convenient, and I now have no ethical issues with it.
briandek 15y ago
On top of solid TV shows, I've been able to find amazing and very recently released foreign films on Netflix. Their anime library also seems to be improving so for me it's become a more valuable alternative than an HBO/Cinemax/Showtime/TMC subscription.
Jun8 15y ago
This is a transient reaction. They still habe 24M subscribers, are a monopoly in their field, and are robustly expanding in other countries. The real danger to Netflix is not subs leaving because of price hikes (what alternative do you have really, shell out $70 per month to Comcast for horrible TV content?) but disruptions to their content sources, like the recent Staz debacle.
- dreamdu5t 15y ago
  Exactly. If there is no revolution in content creation, then Netflix is doomed. Distribution and content creation are inexorably linked. Netflix needs to produce content.
  - sounds 15y ago
    If I can respectfully disagree, I believe content creation is unlimited. There's a quality-quantity curve, sure. Independent films make up for post-production quality by having great writing and acting. I feel this way because I'm convinced the internet is revolutionizing distribution. Therefore, Netflix is way ahead of the game (if you buy what I'm saying). Production costs are plummeting anyway - it's just that big-budget movies always spend about the same amount, but now that money goes farther.
    - cageface 15y ago
      Production costs for big budget films with a lot of effects are skyrocketing, not plummeting.
- ghshephard 15y ago
  I'm curious as to why you think they are a monopoly in their field? On any given evening, when I want to watch video content, it's a total coin toss as to whether I (a) end up buying on iTunes, (b) Go watch with amazon prime, (c) Use netflix, (d) bittorent the content. I end up with (d) only when the content is not available on the first three. I can't say I have any particular bias - so "monopoly" is perhaps an overly strong word.
ahi 15y ago
Netflix is stuck between a rock and a hard place. They don't control the content (the studios) and they don't control the distribution infrastructure (Amazon). They have a large subscriber base but it's just been shown that that might be fleeting. Netflix can't ride any network effect from their customer base. In short, their market position is indefensible. Their suppliers have the interest and ability to wring any profit margin out of them. If the suppliers demand too much, it's just an incentive for the consumers to buy direct from the source.
- brown9-2 15y ago
  This seems to come up in every discussion of Netflix, but they do not use AWS for distributing streaming content.
  - binarycrusader 15y ago
    Really? http://techblog.netflix.com/2011/04/lessons-netflix-learned-from-aws-outage.html http://techblog.netflix.com/2011/04/lessons-netflix-learned-...
    - brown9-2 15y ago
      Would you mind pointing out the parts of that post that lead you to believe otherwise?
    - mjschultz 15y ago
      That doesn't say that Amazon is their CDN at all. They probably use AWS for pages and user-oriented stuff, but content delivery is done through Level 3 [1]. [1] http://www.reuters.com/article/2010/11/11/us-levelthree-idUSTRE6AA3IQ20101111 http://www.reuters.com/article/2010/11/11/us-levelthree-idUS...
    - deleted 15y ago
      [deleted]
dreamdu5t 15y ago
If we ever want to be free of Hollywood's firm grasp, then there needs to be a revolution in content creation. Netflix should create their own shows.
- foobarbazoo 15y ago
  Meet the new boss, same as the old boss. If you want content free from Hollywood, give YouTube a try.
jsdalton 15y ago
The main problem Netflix is facing is not subscribers quitting because of a price hike but their seeming inability to make progress expanding their streaming catalogue.
alexcraig23 15y ago
this doesn't surprise me at all. It's a chain reaction. Prices increase along with subscription rules, subscribers leave, less revenue, less profits, the company is worth less. I'm interested to see how Netflix is going to respond to this. I expect them offer new deals to try and recover users. I canceled my service three weeks ago
ck2 15y ago
The over-reaction kinda confuses me. I hate price increases too but is there is any proof that Netflix is profit-gouging subscribers? Or are their suppliers jacking up the prices and Netflix has to pass it along somehow vs become the next Blockbuster?
joeguilmette 15y ago
maybe it's because the content on Netflix is awful? i exclusively use streaming. i don't have any way to watch a DVD any more than i do a VHS tape. i went back to piracy for movies a few months ago when i realized that there were actually good movies that came out in the 3 years I'd been relying on Netflix. i still use Hulu for TV, but that will change if their content does.
tryitnow 15y ago
As a consumer I know I am supposed to want lower prices, but I also wanter better selection. I'm probably never going to have both. If I had to pick I'd pick higher prices and better selection. So my hope is that Netflix is sincere when they say they raised prices in part to get a bigger selection.
- nigham 15y ago
  Why hope? I quit Netflix streaming because I didn't want to pay more for a selection that has become smaller. I will rejoin if and when they bring a bigger selection.
deleted 15y ago
[deleted]
lionhearted 15y ago
I looked at buying some, it's generally a good idea to buy a fundamentally solid company after an overreaction to a good-long-term/bad-short-term decision. I bought Starbucks right after they got hammered for closing a bunch of stores a few years ago and it did really well. But their price/earnings ratio is still 42.86, which seems high. For perspective, Microsoft is at 9.99 (disclaimer: I own some) and Apple is at 15.56. That means Netflix could double their earnings, and still cost more on a per earning basis than Apple. I just don't see it as a good buy, especially with some tough competitors in streaming content like Amazon, Apple, Hulu, etc. It seems to me like there's lots of very solid buys that are undervalued, going for a sexy industry with a high P/E, no dividend, not much in the way of patents or strong assets, and tough competitors... yeah, I think Netflix is a brilliant company, but I'm not buying their stock at these prices.
EREFUNDO 15y ago
I think Netflix understands that the future is in streaming and not mailing out physical DVD's. Technology has advanced to a point where we can now watch movies in our flat screens with DVD like qualities from streaming. Mailing out DVD's are costly to the company. The change in price is designed to encourage streaming in my opinion. The more people sign up for the streaming service the more movies they can afford to upload for people to watch. In the long run I think this is a really good strategy. The price increase should have been a little lower though.
tsotha 15y ago
I can't help but think the content producers are overplaying their hand here. If they make legal streaming too expensive people who might not have bothered will start using bittorent instead.
loso 15y ago
I see Netflix having a problem on two fronts. The DVD side in having to deal with the USPS crisis and the streaming sides lack of good content while having to pay too much to fix it. The postal service is itself trying to shut down Saturday delivery and night delivery. My dad is a postal worker. Him and most of his fellow coworkers do not have a problem with this change. They know the service is in trouble so they are willing to make compromises. This means that at least some of the changes are going to go through but they have to be authorized by Congress first. Right now the only reason why it hasn't happened yet is that some Congressmen are scared of how these changes are going to affect rural areas in their district. This change by nature is going to lessen the value of Netflix's DVD service. The question is by how much? You would have to order your movie by Wednesday or you're not going to have anything to watch over the weekend. Netflix really does not have any control over this. The streaming sides problems are of course that everyone wants a chunk of the action. If Netflix wants to stream newer movies then they are going to have to pay up. Netflix streaming already has a wide assortment of movies but the most popular section of any video store is the new movie section. Its the same with Netflix as well. Hollywood learned the lessons of the music business vs Apple. They do not want to see that game played again. Apple has a stranglehold on the music world right now. Netflix is not going to be afforded the same luxury in doing the same with movies. The crazy part is that, for me at least, $16 for unlimited streaming and one movie at a time is not a bad value. But it is the jarring way in how they raised the price which had me ready to quit the service all together. The $6 jump felt like a screw you.
ashrust 15y ago
This kind of stuff happens pretty frequently to momentum stocks when they have what is perceived as bad news. Baidu is another stock with similar volatility sometimes caused by news.
delinka 15y ago
Compulsory licensing. Hollywood doesn't care about markets nor allowing demand to pick the products and services that are best for consumers. Let's get parity between movies and music by instituting compulsory licensing for movies and video media. Once MGM has "performed" or distributed their newest blockbuster, others are allowed to follow suit as long as they pay the licensin fee.

106 points by SHOwnsYou 15y ago

so if i read this correctly, 4% subscriber attrition, but they are jacking up prices like 60% right? still likely going to make more $...

evilduck 15y ago
That's if subscribers keep the same level of service. Their subscriber count could stay relatively flat while everyone drops disc delivery service and their revenue wouldn't change by +60%.
dminor 15y ago
Maybe. I'm sure a lot of people also downgraded but didn't quit completely. I know I did.
Klinky 15y ago
This is the first wave, I am sure there will probably be more people next month who see their credit card statement and wonder why their bill is twice as much.

wccrawford 15y ago

This reminded me that I hadn't used my account in a long time, so I cancelled it. I was greeted with: "Cancellation will be effective immediately - no refunds for partial months." ... That made me even more determined to get out of there. I can't believe they think I'll be back if they have that attitude.

crenshaw 15y ago
That's horrible. This article did also remind me to cancel my streaming (but now I'll wait until the end of the month ;-). I'm going the surprising route of doubling down on DVDs now.
- wmf 15y ago
  I canceled streaming (and kept DVDs) the other day and it takes effect at the next billing cycle. If they don't want to offer refunds, they could at least make cancellation effective at the end of the already-paid-for month.
- mechanical_fish 15y ago
  No surprise to me - I'd prefer the DVD route myself. The streaming service has a fraction of the content and is apparently destined to grow smaller, or more expensive, if the Starz news is any kind of bellwether. My fear now is that the golden age of rental DVDs will come to an end before I have finished enjoying it. I want to be able to watch older or obscurer films, and the disks are better for that, probably because they don't require me or the rental company to acquire and maintain a stupid never-ending oft-renegotiated contract with a movie studio and its lawyers.
  - hack_edu 15y ago
    While I doubt that the market for older and obscure DVD rentals is going anywhere, most of the titles you seek are likely available in your library system. Ordering them on (free) loan from nearby branches would take about as long as Netflix would to postal mail it.
desigooner 15y ago
That was the same mistake I made. I cancelled sometime at the beginning of last week. With a better part of the month ahead, it was very strange to see a message like that from Netflix (who have been very good in the past as far as customer service goes)
dedicated 15y ago
When was the last time they gave partial refunds? I think this was the case even years ago. I agree with the tone of the wording though; it has that passive aggressiveness that we paying customers shouldn't have to endure.
parfe 15y ago
>Please note: > Return outstanding DVDs within 7 days of cancelling to avoid charges to your credit card. > Cancellation will be effective immediately - no refunds for partial months. > Instant streaming on your computer or via any Netflix ready device will no longer be available. I also went to cancel but Netflix placed the "No partial months" stipulation as the second sentence on the page. They did not bury the terms and they did nothing underhanded as your post implies.
- deleted 15y ago
  [deleted]

r00fus 15y ago

I never understood why Netflix effectively divorced their two major offerings. At one point, it made sense to carry the DVD subscription even if you're primarily a streaming customer. However, as they currently structure it, these two services (DVD vs. streaming) could be separate companies and now almost compete for the same dollars. Also I wonder if the loss of Starz is a bigger impact to their stock price than the lack of subscriber growth.

timdorr 15y ago
Their Starz content doesn't run out until February of next year, so it won't have a real impact on subscribers until then.
- r00fus 15y ago
  Yeah, but it could affect stock price today. Stock valuation is inherently forward-looking.
- garethsprice 15y ago
  Not so sure about that, they just split the offerings which is already causing a lot of users to evaluate their subscriptions, hearing about the ending of the Starz contract will affect that decision. I love the concept and want to support the company, but I feel like the value of their offering just dropped drastically (I lost the DVDs by mail, so down to half the content, then losing Starz means that I'm essentially getting 1/4 of the content - if that - for the same price). Previously we just let the subscription get charged, even if we had a busy month and didn't watch anything, but I feel like if I'm going to have to go to that "Change Account" screen then "Cancel" is going to be the most appealing option. Netflix needs to do a better job of engaging it's customers and explaining the reasons behind the price hikes, and offering an incentive to stay - even if it's "hey, the studios are screwing us, please stick by us and be part of ending that messed-up system".
deleted 15y ago
[deleted]
pkteison 15y ago

funkah 15y ago

I have a feeling that this could just be a blip on the radar and Netflix's business is actually OK long-term, but I am one of the people who quit when they announced the price hike. Not because I didn't want to pay more, but because it was the last straw of me realizing I wasn't getting much value for my money in the first place. Their instant streaming service never had what I wanted to watch, and I'm no longer willing to deal with the two-day turnaround time for the DVDs. (I'm not proud of that last fact, BTW.)

pork 15y ago
> I'm no longer willing to deal with the two-day turnaround time for the DVDs. (I'm not proud of that last fact, BTW.) I don't see why that's unreasonable -- they've had instant viewing for quite some time now, but the online collection has been woefully lacking for an equally long amount of time. It's very reasonable not to be satisfied with the 2 day turnaround time on good stuff, when thousands of B-movies are available instantly. If they hadn't introduced all 7 seasons of TNG, I would have quit too.
- veyron 15y ago
  I feel ashamed for having to ask, but what's TNG?
  - ubercore 15y ago
    Star Trek, The Next Generation.
  - pkdevil 15y ago
    The Next Generation (Star Trek)
  - deleted 15y ago
    [deleted]
- Florin_Andrei 15y ago
  > If they hadn't introduced all 7 seasons of TNG Thanks for the heads-up, I didn't know that.

dendory 15y ago

I think there's a lot of overreacting. Personally, I don't really see any alternative to Netflix, even though their selection sucks here. I don't have cable so no option there. Hulu isn't available in Canada, most websites like NBC or ComedyCentral don't allow us to view either. Amazon rentals or buying is so much more expensive, I'd get a handful of movies for the same price as unlimited Netflix. So again, who gives a better deal than Netflix?

lgbr 15y ago
In the US, Amazon Prime offers free streaming very similar to Netflix. It comes with your regular Amazon Prime membership that gives you free two day shipping on everything. The selection is obviously not nearly as thorough as Netflix (which from what I hear is poor to begin with), but I have few doubts about Amazon's ability to catch up.
ubercore 15y ago
Free streaming of certain movies/TV shows on Amazon with a Prime membership is arguably a better value. Selection seems to be mostly the same as Netflix, though device penetration is far more shallow. Still works on my Roku, though.
- pkamb 15y ago
  No Xbox 360 app.
- tsycho 15y ago
  IMHO, Amazon's free collection that comes with a Prime membership is quite horrible. Or maybe you like different stuff than me. And their interface on Roku is even worse - ugly, long lists of movies with no way to search or skip through the list - all seasons for a series (I think Doctor Who has some 20+ seasons there) are placed in the above list as individual shows (rather than being grouped together), and are not even in chronological order Netflix's interface on Roku is a godsend in comparison.
  - ubercore 15y ago

pkteison 15y ago

I think it's weird that wall street responds to customer numbers going down, rather than the announcement that their costs were going up by an order of magnitude. "One analyst predicts that Netflix's streaming content licensing costs will rise from $180 million in 2010 to a whopping $1.98 billion in 2012." - Netflix needing to reprice to deal with that change is -why- people are quitting, and it's been a known problem for several months now, so why did the stock drop wait?

veyron 15y ago
There's lots of talk about customers leaving now. That's known, and that's occurring now. Rising costs are in the horizon, and it's not known if Netflix can leverage its position to strongarm a better content licensing deal.

vaksel 15y ago

the problem with Netflix is that over the past year they started offering less and less content on Instant Streaming(what most people tended to use). And the content they do have left is subpar at best. Sure there are a few good shows....but overwhelmingly anything popular is not available.

aaronbrethorst 15y ago
I'd disagree with you, but I'm too busy watching Mad Men and Breaking Bad on Netflix right now.
- brndnhy 15y ago
  That's a lot easier when you're a year or more behind following a television series.
  - aaronbrethorst 15y ago
    Netflix Streaming is the only way I consume TV, so yeah, I'm definitely at least a year or more behind :)
dcosson 15y ago
I don't know if I'd go that far, I still manage to find interesting things to watch on a regular basis. That said, I would happily pay 2 or 3x more if all of their dvd selection was available on instant (of course, I have no idea if that's feasible for them or if it would cost me more like 10x more for what the studios would charge)
bostonvaulter2 15y ago
I think you mean anything currently popular.
MaxGabriel 15y ago
Before my family cancelled netflix, my major problem wasn't that there was no content that I enjoyed, but that I had no way of finding that content. Their ratings system was really unreliable for me, so finding quality was difficult. On the other hand, when I heard about films by word of mouth, and found them on Netflix, I really ended up enjoying them. I always found that Dish Network had a really reliable content rating system--it was an objective star system not based on user preferences. Some combination of this with tailoring to individual users might be the best fit for Netflix--it would help users find content, but it would also provide an objective measure that lets me validate the 'users like me' rating system the use now. If Netflix had a better algorithm/system for helping find content, and a dash of Hipmunk UI, then I'd still be a customer.

sudonim 15y ago

Fewer subscribers = lower revenues. <- That's the problem. Fewer subscribers = More articles about fewer subscribers = FUD = Lower stock price <- Not the problem. The movement of the stock price doesn't affect Netflix' viability as a business. Kudos to them for making the business more targeted towards online streaming. I hated having to pay for physical DVDs when all I used was streaming. I switched my plan as soon as I could. I don't use Netflix all the time. For most shows, I auto-steal them after they air. For casual watching, I use Netflix and watch things like Pawn Stars, Trailer Park Boys, and other series long after they've aired. It fills the "I just want to flip on the TV and see something I wasn't expecting. I don't care what it is" need.

maratd 15y ago
> Fewer subscribers = lower revenues. <- That's the problem. That's not the problem. In fact, it might be the solution. What matters is profitability, not revenue.
- pchristensen 15y ago
  They have large fixed costs for content. Subscriber growth amortizes those costs across a wider base.
  - sounds 15y ago
    Although that's a fair first-order approximation, look here: http://files.shareholder.com/downloads/NFLX/1403529688x0x500395/7c72e777-75c5-4f7f-9640-5b06f8cc54e4/Guidance_Update_Sept_2011_final.pdf http://files.shareholder.com/downloads/NFLX/1403529688x0x500... I'd break their costs down into per-byte costs and per-subscriber costs. The fixed content costs are only fixed until they renegotiate their contracts. Most media businesses look to merge with the content creators to eliminate those costs altogether. I believe the real discussion going on is whether Netflix has a viable long-term business model. I believe they do, and I'm glad they got rid of DVDs.
jellicle 15y ago
Has anyone actually done the math here: 25 million customers at $10/month was the old calculus; 24 million customers at $16/month is the new calculus; I don't see any problem here. At all. (Okay, I'm handwaving because I'm too lazy to actually look up the revenue figures, but losing subscribers when you raise your prices is not necessarily a bad thing at all.)

fuzzythinker 15y ago

PE is still 43+. Their subscription rate change only speeds up the inevitable realization of their stock being way over valued. Unless they have some plan that takes them to another level, their stock would have to come back down to earth sooner or later.

cletus 15y ago

The idea that people are quitting now because of theoretical price hikes in two years is... ludicrous. Remember that Netflix is month-to-month. People will leave when they no longer get value from it now. Netflix movie selection doesn't seem to be great. In my case I subscribe to it for the TV shows more than anything else and for $8/month, the cost is easy to justify. YMMV. I see Netflix's problem as this: - Hollywood increasingly sees Netflix as a problem rather than an additional avenue for revenue. The studios may be concerned about creating another iTunes (virtual monopoly); - Studios and distributors increasingly want to go on their own, which is really bad for consumers and seems to be driven by simple greed of cutting out the middleman without realizing what that middleman is actually doing for you; - Netflix uses Amazon for scale. This is a problem. As much as burst architectures have theoretical advantages, the costs just don't add up beyond a certain size. I cannot believe that Netflix isn't at the point where they'd be better off owning their own servers; - There's no offline viewing. IMHO Apple will increasingly address this market. Netflix needs to as well. When people are mobile they usually don't have a sufficient data connection, particularly if on a train or plane. Netflix seems to want to go the HBO route of creating original content. This is an incredibly dangerous game to play with them forking out big bucks [1]. At least AMC's content in comparison is relatively cheap to produce and they have a relatively stable income due to cable bundling (although they're struggling with rising costs of Mad Men). EDIT: Let me clarify. 2012 price hikes don't drive consumers. Current value and current price hikes drive consumer behaviour. The recent price hike in DVD+streaming will no doubt have caused some to drop the service. They could drop either streaming or DVD or possibly both. I'm inclined to believe that DVD is an ever-smaller piece of their business but it may yet be significant to have a real impact on subscriber counts (in terms of subscriber loss). [1]: http://www.reuters.com/article/2011/03/21/idUS176332428720110321 http://www.reuters.com/article/2011/03/21/idUS17633242872011...

timr 15y ago
"The idea that people are quitting now because of theoretical price hikes in two years is... ludicrous." It's not a theoretical price hike in two years. My bill goes up at the end of this month.
unexpected 15y ago

ZipCordManiac 15y ago

The movie companies are just shooting themselves in the foot. If I can't find it on Netflix or download a copy for a reasonable price (I'd pay a couple bucks to download a movie and have permanent copy...), I'll torrent it. Their loss.

MatthewPhillips 15y ago
You're not their target customer.
- ZipCordManiac 15y ago
  I am a HUGE media consumer, trendsetter, and generally on the bleeding edge of entertainment in my group of friends. I am their EXACT target, they just don't know how to market to me. I am the one telling my friends about new movies and tech, making sure they see what is good. I would without a doubt spend much MUCH more money then your average consumer if they made it available at reasonable speeds in a DRM-free format. (xVid, MP4, Mkv) I want to pay, and support the artists, and 'own' the material to move around on my own computers. The studios however won't let me unless I purchase physical content and do the rips myself. So most of the time I only up getting the blu-ray months down the road if it's something special. The only person who 'wins' in this situation is me, and I wish this weren't the case.
- archangel_one 15y ago
  And over time, they are going to end up with fewer and fewer target customers if they keep this up.
- angrycoder 15y ago
  People who want to consume media and are willing to pay money for easy access to it aren't their target market?
  - MatthewPhillips 15y ago
    People who are only willing to pay half of the market rate are not their target customer.

ilamont 15y ago

I wouldn't underestimate Netflix. Their business model and viability has been doubted by Wall Street and others for years (see http://www.usatoday.com/money/media/2004-10-17-netflix-dvd-war_x.htm http://www.usatoday.com/money/media/2004-10-17-netflix-dvd-w... and http://www.fool.com/investing/general/2007/12/27/will-apple-kill-netflix.aspx http://www.fool.com/investing/general/2007/12/27/will-apple-...) but the company has always been very clever with their product strategy and partnerships. As for the drop in subscriber numbers, it's understandable that people don't like price hikes, but losing less-profitable DVD customers may not be a bad thing in the long run. Postage and regional distribution centers are a drag on the company. Reducing those costs frees up funds for content distribution deals.

sp332 15y ago
I think CNN is being hyperbolic because Time Warner (CNN's parent company) sees them as a threat.
- invisiblefunnel 15y ago
  Isn't Turner Broadcasting (http://www.turner.com/ http://www.turner.com/) the parent of CNN? Or am I missing some information?
  - sp332 15y ago
    I think the news program is part of Turner Broadcasting System, but the organization is owned by Time Warner. But I only know this from Wikipedia. https://secure.wikimedia.org/wikipedia/en/wiki/CNN https://secure.wikimedia.org/wikipedia/en/wiki/CNN
  - mikeryan 15y ago
    Turner is an "autonomous" subsidiary of Time Warner.
seanalltogether 15y ago
A lot of people seem to think that the recent price changes are done to discourage dvd rentals because they are less profitable. I see it the other way, the recent separation in prices were done to isolate dvd profits from the rest of netflix. Make no mistake that the studios are already working on deals that will bleed netflix dry. They will look to squeeze every last penny of profit out of the streaming division. By separating the 2 units, netflix is making sure the dvd unit can chug along merrily with their relatively fixed profits that the studios can't bargain for.

18pfsmt 15y ago

I agree with some of what you've written, but I have a few nitpicks from the interviews with their CEO that I've seen, > Hollywood increasingly sees Netflix as a problem rather than an additional avenue for revenue. The studios may be concerned about creating another iTunes (virtual monopoly) I think they see the NFLX subscriber numbers and are simply looking to get a bigger cut >There's no offline viewing. IMHO Apple will increasingly address this market. Netflix needs to as well. When people are mobile they usually don't have a sufficient data connection, particularly if on a train or plane. I don't believe that is how NFLX perceives itself. They seem to understand their market is a niche, and they don't see themselves as the place to go for the latest TV episodes, for example. >Netflix seems to want to go the HBO route of creating original content. I believe they see their ability to directly negotiate with studios (i.e. content creators) as a major source of leverage when dealing with the content owners moving forward. Edit: Fixed horrible formatting. This was a response to cletus that got interrupted by a minor office fire drill :(

kin 15y ago

If it were up to Netflix they would give customers the content they want for the price that they want. Hollywood obviously wasn't going to let this slide and I fear streaming services will soon hike to cable-like prices. Also, people paid for separate Netflix accounts because they each wanted their own accounts for DVDs. Now that Netflix upped their device count to a whopping 50 and split DVDs and Streams, I wouldn't be surprised if everyone went Stream only and shared their account with 10 other friends. That's certainly what I'm doing. As for DVD's? Well, piracy has become what's convenient, and I now have no ethical issues with it.

briandek 15y ago

On top of solid TV shows, I've been able to find amazing and very recently released foreign films on Netflix. Their anime library also seems to be improving so for me it's become a more valuable alternative than an HBO/Cinemax/Showtime/TMC subscription.

Jun8 15y ago

This is a transient reaction. They still habe 24M subscribers, are a monopoly in their field, and are robustly expanding in other countries. The real danger to Netflix is not subs leaving because of price hikes (what alternative do you have really, shell out $70 per month to Comcast for horrible TV content?) but disruptions to their content sources, like the recent Staz debacle.

dreamdu5t 15y ago
Exactly. If there is no revolution in content creation, then Netflix is doomed. Distribution and content creation are inexorably linked. Netflix needs to produce content.
- sounds 15y ago
  If I can respectfully disagree, I believe content creation is unlimited. There's a quality-quantity curve, sure. Independent films make up for post-production quality by having great writing and acting. I feel this way because I'm convinced the internet is revolutionizing distribution. Therefore, Netflix is way ahead of the game (if you buy what I'm saying). Production costs are plummeting anyway - it's just that big-budget movies always spend about the same amount, but now that money goes farther.
  - cageface 15y ago
    Production costs for big budget films with a lot of effects are skyrocketing, not plummeting.
ghshephard 15y ago
I'm curious as to why you think they are a monopoly in their field? On any given evening, when I want to watch video content, it's a total coin toss as to whether I (a) end up buying on iTunes, (b) Go watch with amazon prime, (c) Use netflix, (d) bittorent the content. I end up with (d) only when the content is not available on the first three. I can't say I have any particular bias - so "monopoly" is perhaps an overly strong word.

ahi 15y ago

Netflix is stuck between a rock and a hard place. They don't control the content (the studios) and they don't control the distribution infrastructure (Amazon). They have a large subscriber base but it's just been shown that that might be fleeting. Netflix can't ride any network effect from their customer base. In short, their market position is indefensible. Their suppliers have the interest and ability to wring any profit margin out of them. If the suppliers demand too much, it's just an incentive for the consumers to buy direct from the source.

brown9-2 15y ago
This seems to come up in every discussion of Netflix, but they do not use AWS for distributing streaming content.
- binarycrusader 15y ago
  Really? http://techblog.netflix.com/2011/04/lessons-netflix-learned-from-aws-outage.html http://techblog.netflix.com/2011/04/lessons-netflix-learned-...
  - brown9-2 15y ago
    Would you mind pointing out the parts of that post that lead you to believe otherwise?
  - mjschultz 15y ago
    That doesn't say that Amazon is their CDN at all. They probably use AWS for pages and user-oriented stuff, but content delivery is done through Level 3 [1]. [1] http://www.reuters.com/article/2010/11/11/us-levelthree-idUSTRE6AA3IQ20101111 http://www.reuters.com/article/2010/11/11/us-levelthree-idUS...
  - deleted 15y ago
    [deleted]

dreamdu5t 15y ago

If we ever want to be free of Hollywood's firm grasp, then there needs to be a revolution in content creation. Netflix should create their own shows.

foobarbazoo 15y ago
Meet the new boss, same as the old boss. If you want content free from Hollywood, give YouTube a try.

jsdalton 15y ago

The main problem Netflix is facing is not subscribers quitting because of a price hike but their seeming inability to make progress expanding their streaming catalogue.

alexcraig23 15y ago

this doesn't surprise me at all. It's a chain reaction. Prices increase along with subscription rules, subscribers leave, less revenue, less profits, the company is worth less. I'm interested to see how Netflix is going to respond to this. I expect them offer new deals to try and recover users. I canceled my service three weeks ago

ck2 15y ago

The over-reaction kinda confuses me. I hate price increases too but is there is any proof that Netflix is profit-gouging subscribers? Or are their suppliers jacking up the prices and Netflix has to pass it along somehow vs become the next Blockbuster?

joeguilmette 15y ago

maybe it's because the content on Netflix is awful? i exclusively use streaming. i don't have any way to watch a DVD any more than i do a VHS tape. i went back to piracy for movies a few months ago when i realized that there were actually good movies that came out in the 3 years I'd been relying on Netflix. i still use Hulu for TV, but that will change if their content does.

tryitnow 15y ago

As a consumer I know I am supposed to want lower prices, but I also wanter better selection. I'm probably never going to have both. If I had to pick I'd pick higher prices and better selection. So my hope is that Netflix is sincere when they say they raised prices in part to get a bigger selection.

nigham 15y ago
Why hope? I quit Netflix streaming because I didn't want to pay more for a selection that has become smaller. I will rejoin if and when they bring a bigger selection.

deleted 15y ago

[deleted]

lionhearted 15y ago

I looked at buying some, it's generally a good idea to buy a fundamentally solid company after an overreaction to a good-long-term/bad-short-term decision. I bought Starbucks right after they got hammered for closing a bunch of stores a few years ago and it did really well. But their price/earnings ratio is still 42.86, which seems high. For perspective, Microsoft is at 9.99 (disclaimer: I own some) and Apple is at 15.56. That means Netflix could double their earnings, and still cost more on a per earning basis than Apple. I just don't see it as a good buy, especially with some tough competitors in streaming content like Amazon, Apple, Hulu, etc. It seems to me like there's lots of very solid buys that are undervalued, going for a sexy industry with a high P/E, no dividend, not much in the way of patents or strong assets, and tough competitors... yeah, I think Netflix is a brilliant company, but I'm not buying their stock at these prices.

EREFUNDO 15y ago

I think Netflix understands that the future is in streaming and not mailing out physical DVD's. Technology has advanced to a point where we can now watch movies in our flat screens with DVD like qualities from streaming. Mailing out DVD's are costly to the company. The change in price is designed to encourage streaming in my opinion. The more people sign up for the streaming service the more movies they can afford to upload for people to watch. In the long run I think this is a really good strategy. The price increase should have been a little lower though.

tsotha 15y ago

I can't help but think the content producers are overplaying their hand here. If they make legal streaming too expensive people who might not have bothered will start using bittorent instead.

loso 15y ago

I see Netflix having a problem on two fronts. The DVD side in having to deal with the USPS crisis and the streaming sides lack of good content while having to pay too much to fix it. The postal service is itself trying to shut down Saturday delivery and night delivery. My dad is a postal worker. Him and most of his fellow coworkers do not have a problem with this change. They know the service is in trouble so they are willing to make compromises. This means that at least some of the changes are going to go through but they have to be authorized by Congress first. Right now the only reason why it hasn't happened yet is that some Congressmen are scared of how these changes are going to affect rural areas in their district. This change by nature is going to lessen the value of Netflix's DVD service. The question is by how much? You would have to order your movie by Wednesday or you're not going to have anything to watch over the weekend. Netflix really does not have any control over this. The streaming sides problems are of course that everyone wants a chunk of the action. If Netflix wants to stream newer movies then they are going to have to pay up. Netflix streaming already has a wide assortment of movies but the most popular section of any video store is the new movie section. Its the same with Netflix as well. Hollywood learned the lessons of the music business vs Apple. They do not want to see that game played again. Apple has a stranglehold on the music world right now. Netflix is not going to be afforded the same luxury in doing the same with movies. The crazy part is that, for me at least, $16 for unlimited streaming and one movie at a time is not a bad value. But it is the jarring way in how they raised the price which had me ready to quit the service all together. The $6 jump felt like a screw you.

ashrust 15y ago

This kind of stuff happens pretty frequently to momentum stocks when they have what is perceived as bad news. Baidu is another stock with similar volatility sometimes caused by news.

delinka 15y ago

Compulsory licensing. Hollywood doesn't care about markets nor allowing demand to pick the products and services that are best for consumers. Let's get parity between movies and music by instituting compulsory licensing for movies and video media. Once MGM has "performed" or distributed their newest blockbuster, others are allowed to follow suit as long as they pay the licensin fee.