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Garemlin
09-15-2011, 08:19 PM
NEW YORK (CNNMoney) -- Netflix subscribers threatened to flee in droves when the company whacked them with a surprise price hike, which kicked in this month.

Now they're making good on that threat. Netflix on Thursday cut its subscriber forecast for the current quarter, saying it now expects to end the period with 24 million customers -- down from the 25 million the company forecast just a few weeks ago.

That's also down from the 25.6 million global subscribers Netflix had on June 30, the end of its second quarter.

Investors punished the stock, sending Netflix (NFLX) shares down nearly 19% -- even though the company did not change its earnings or sales guidance.

The writing has been on the wall since July, when Netflix angered many subscribers by saying it would begin charging separate prices for its DVDs-by-mail and streaming video plans. That amounted to a big price hike for Netflix customers, as the cheapest-possible bill for customers who want both services jumped from $10 to $16 a month.

Enraged customers flooded Netflix's site with tens of thousands of comments, as well as a barrage of tweets under the hashtag #DearNetflix.

Angry subscribers aren't good for business, of course, but even more concerning are the reasons for the price hike. Netflix is struggling to build and maintain a robust streaming catalog, but that's getting tougher as studios demand more money and threaten to take their content to Netflix's growing list of rivals.

As a result, customers have been complaining about a smaller selection -- and asking why they're paying more for less. Earlier this month, cable network Starz ended contract renewal negotiations with Netflix and will pull its movies and TV shows from Netflix early next year. It highlights the sometimes contentious relationship that Netflix has with content owners such as Sony (SNE), Walt Disney (DIS, Fortune 500) and Time Warner (TWX, Fortune 500), the parent company of CNNMoney.

Now that streaming video is so popular, providers are upping the price for the content they're licensing to Netflix. 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.

"There may be a renewed sense of urgency for Netflix to go out to acquire film and TV content to replace Starz," says Anthony DiClemente, Internet and media analyst at Barclays Capital, which owns Netflix stock.

"To keep subscribers, or lure them back, you need offer them value at a good price," DiClemente adds.

Netflix's competitors have become a bargaining chip for studios: If Netflix won't pay studios what they think their content is worth, they'll simply take their business elsewhere.

Beyond direct rivals like Hulu and kiosk service Redbox (owned by Coinstar (CSTR)), big tech players like Amazon (AMZN, Fortune 500) and Google (GOOG, Fortune 500) are jumping into the streaming game. Cable providers including DISH Network (DISH, Fortune 500) are also ramping up streaming, on-demand options.

Despite its growing list of problems, Netflix has been one of the hottest-performing tech stocks of the past few years. Shares are up a staggering 460% since 2008.

DiClemente, the Barclays analyst, is still bullish on Netflix shares. He now predicts that the U.S. subscriber base will recover to 28.8 million by the end of the year -- though that's lower than the 30 million he had projected.

Netflix had been adding subscribers "radically," he says, noting that in recent quarters the company's revenue has been up about 40% to 50% year-over-year -- which gives it a fatter wallet for snapping up new content.


Source: CNNMoney (http://money.cnn.com/2011/09/15/technology/netflix/index.htm)

JSM9872
09-16-2011, 09:01 AM
Does not surprise me. I am probably going to dump my subscription once I finish up the last few things I am currently watching. Just does not seem worth it with the internet being free and a place where one can easily find all of these things to watch.

dsteinschneider
09-17-2011, 12:21 AM
I subscribed to netflix for about a year and ran out of things to stream. I'm not that interested in sitcoms or law and order offshoots. It took longer and longer to find movies. I would go on movie forums and review sites and gather suggestions from movie buffs. I did watch some great movies I probably otherwise would never have seen. One day when I realized that no one in the house had bothered to send the latest DVD back for the past two months I cancelled. Even the DVD selection was challenging for us. I'm actually thinking if they can pay the studios more and have a much wider selection than perhaps I would consider paying $20/month. That would tie in with our considered cancellation of cable TV.

Snipples007
09-17-2011, 01:44 AM
I was actually just talking about this with my friend last night. I literally had a movie pulled from Instant Stream when I clicked on it last week. It started loading, played for a second, gave an error, so I reset my PS3, and the movie was gone completely when I reopened Netflix. They got rid of so many of my favorite shows and movies that I have nothing to watch on emerge there anymore. I have two months free of Hulu Plus, but they don't stream the shows people actually want to watch over the PS3, you have to watch it on your computer... and don't even get me started on the 60 seconds of ads they make you sit through every 10 minutes. Honestly though, I've had better luck finding things on YouTube lately than I have on Hulu or Netflix. Hopefully though, when this economy finally starts getting better, things will go back to normal.

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hillmom
09-17-2011, 03:50 AM
I was going over our budget yesterday and remember our bill is jumping this month. With money being so tight for us, and so many others it doesn't take much of a price jump for something to no longer work financially. We'll pay this month, but next, I have no idea. It may mean just regular free tv for awhile.

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ArcAngL
09-17-2011, 05:37 AM
I have enjoyed my netflix subscription so far but only because it's pretty much the only option right now for legally streaming decent quality movies and shows on my X and pc. Once other companies get theirs up and running ill probably switch if they have a better selection.

My main beef with netflix is their crummy selection of movies for streaming. Most of them seem to be lower budget or too outdated. If they put up more current releases for streaming and keep it up to date ill stick with them though.

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JSM9872
09-17-2011, 09:34 AM
I have enjoyed my netflix subscription so far but only because it's pretty much the only option right now for legally streaming decent quality movies and shows on my X and pc. Once other companies get theirs up and running ill probably switch if they have a better selection.

My main beef with netflix is their crummy selection of movies for streaming. Most of them seem to be lower budget or too outdated. If they put up more current releases for streaming and keep it up to date ill stick with them though.

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Thats definitely the issue here. Charging more but losing contracts or not getting new ones leading to a smaller, outdated selection.

gbrinn
09-19-2011, 06:20 PM
Figured something like this would happen. And now they've announced that they are splitting the streaming and mail-based stuff into two companies. The streaming will stay as Netflix and the DVD-mail-in format will be spun-off as Qwickster.

9wire
09-19-2011, 06:37 PM
More than once a movie I wanted to watch was only available on DVD. Movies 3 or 4 years old. Frustrating.

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gbrinn
09-19-2011, 07:03 PM
More than once a movie I wanted to watch was only available on DVD. Movies 3 or 4 years old. Frustrating.

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Or older...and a good chunk of newer content is getting yanked with contract dispute between Netflix and Starz.

volox
09-20-2011, 05:20 PM
I think the split of the two services that they announced yesterday will be what does them in. In a world where people are looking for consolidation of services and easier ways to get information, why on earth would you seperate the two services? Now my recommendations for DVD will only be based on what I've watched on DVDs? And if I can't find something on streaming I'll have to go to a different site to put it in my queue for DVDs? That just sucks. Bye-bye Netflix.

gbrinn
09-20-2011, 06:11 PM
Yeah, they've taken a beating in the editorials on this. Why raise the price and then two months later announce you're ditching the bread/butter of the service and making it a stand alone company. Their management has handled both the price increase and this very, very badly.

Leach19m
09-20-2011, 08:01 PM
Man, I really didn't want to drop my netflix...but thinking about it, I really don't use it Anymore. Mostly used it to watch Sparticus and weeds, but it'll be cheaper just to get starz or showtime now

My name is Mike, and I'm a flashaholic. But thanks to my sponsor, MIUI, I've been clean for weeks.

Mike7143
09-20-2011, 08:04 PM
I'll be cancelling my plan with them soon too. I pay for it but haven't watched anything on Netflix in a month. Selection is bad. I hate seeing the same recommended movies in the list... If it's been in the list for that long and I have yet to watch it, don't suggest it to me! I practically laughed out loud when I read they're naming their DVD-by-mail division Quikster... It's like they asked a 5 year old to name a company that sends movies in the mail fast and took the first idiotic thing they said. What disappoints me the most is that I just bought a house and was looking at options for entertainment, i.e. Netflix, Hulu, Comcast cable, etc. None of them are a deal anymore. $120/mo for cable? $7/mo for Hulu but you have to watch ads? $7/mo for no streaming selection. If people thought piracy was an issue before, I can guarantee that it will be an epic "issue" soon. At this point I'm just gonna go back to rabbit ears. End rant.

TL;DR - Netflix messed up. Quikster is a joke. Piracy will be conquer.

EDIT: I will say though that if I decide to get something, it'll be Hulu Plus even though it has ads.

Leach19m
09-20-2011, 08:09 PM
Ouch 120/month for cable??? I pay less than 90/month for dish network, all the channels (short of the alacart premium ones) and HD

My name is Mike, and I'm a flashaholic. But thanks to my sponsor, MIUI, I've been clean for weeks.

gbrinn
09-20-2011, 08:12 PM
TV show reruns are about all that keep me with Netflix. With them dropping the ball in re: Starz, they won't have doodley-squat that's not ancient and/or lame, B-quality, in terms of movies.

Mike7143
09-20-2011, 08:17 PM
Ouch 120/month for cable??? I pay less than 90/month for dish network, all the channels (short of the alacart premium ones) and HD

Well, Comcast, like a bunch of other companies, offers the "bundles" which sounds great, but then you read the fine print. HD channels with a standard tier and internet are an amazing $90/month!!!! for the first 6 months Then after that they jack it up the the normal $115 or something. Right now my plan is to get a $40/mo internet package with no TV and just use Hulu online and etc. MAYBE get Hulu Plus.

Or maybe I go with satellite. I've never liked satellite, had it at my other place and whenever there was weather it'd cut out. But I suppose it'd be better to have signal issues every so often than be bent over by the cableco's

gbrinn
09-20-2011, 08:24 PM
Well, Comcast, like a bunch of other companies, offers the "bundles" which sounds great, but then you read the fine print. HD channels with a standard tier and internet are an amazing $90/month!!!! for the first 6 months Then after that they jack it up the the normal $115 or something. Right now my plan is to get a $40/mo internet package with no TV and just use Hulu online and etc. MAYBE get Hulu Plus.

Or maybe I go with satellite. I've never liked satellite, had it at my other place and whenever there was weather it'd cut out. But I suppose it'd be better to have signal issues every so often than be bent over by the cableco's



Satellite, for all the signal loss during heavy rain, has more channels for the same or lower price as cable. Had to get DSL when we dropped cable, but the speed's the same.

Cable bundles are a joke...

Konceptz804
09-21-2011, 09:42 AM
eh, I'm pleased with netflix. $8 bucks a month to be able to stream to 90% of my internet enabled devices in the house....all my daughter's favorite Nick Jr shows, movies I've never seen, anime, etc....I dont have a single complaint. Also netflix is going to start renting videogames too!?!? I really dont see what all the fuss is about, its stil cheaper then cable.

saul1991
09-21-2011, 11:08 AM
I hope everyone ends their subscriptions with Netflix. There's no good movies to stream

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gbrinn
09-21-2011, 03:24 PM
I have a feeling that we've just begun to see the plunge in stock value...

JSM9872
09-21-2011, 11:14 PM
Yeah I have been doing some soul searching. I do not use it enough anymore to keep it. I kept telling myself I did and then I realized the last few things I watched on there I actually owned anyway so its not worth the money.

Nickolas
09-21-2011, 11:28 PM
I think most of us can agree that the movie selection sucks for streeming. Thats y they offerEd the dvds. So u could see newer stuff. but if there show selection is also shrinking and is mostly shows that ive never even heard of and just look like bad spin offs? Come on netflix, buzz off.

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DpwnShift
09-22-2011, 12:36 AM
A 60 percent price hike *AND* no more Starz content?!? I'll see you in H3ll, NetFlix!!! I am done with them. Now their stock is down a whopping 38% since September 15th, and they are reportedly "humbled" by customer reaction. Just not enough to do anything about it... Vote with your wallets, people; there are more and more places to get content these days!

Leach19m
09-22-2011, 12:38 AM
No more starz=no more netflix for me *

JSM9872
09-22-2011, 01:06 AM
A 60 percent price hike *AND* no more Starz content?!? I'll see you in H3ll, NetFlix!!! I am done with them. Now their stock is down a whopping 38% since September 15th, and they are reportedly "humbled" by customer reaction. Just not enough to do anything about it... Vote with your wallets, people; there are more and more places to get content these days!


No more starz=no more netflix for me *

+1. Or would it be +2 since its both? Either way I agree...

gbrinn
09-22-2011, 10:39 AM
Not sure what I would move to; I don't want to watch ads.