Netflix’s higher prices lead to fewer customers

When Netflix Inc (NFLX-Q169.25-39.46-18.91%). announced two months ago that it would hike prices for its U.S. subscribers, the company said it wanted to give customers more choice. Now, just two weeks after those prices came into effect for existing members, a number of them have made their choice: to walk away from Netflix altogether.

In fact, enough members have decided to drop the service as a result of the pricing change that on Thursday, Netflix was forced to adjust its predictions for how many subscribers it will keep this quarter. By the time it reports third-quarter results next month, it will have one million fewer subscribers than it predicted in... [Read More]

Summary Box: Netflix's fortunes sink on price hike

Netflix's decision to raise the prices of its video subscription service by as much as 60 percent isn't panning out like management anticipated. The company warned investors Thursday the higher rates are triggering more cancellations than it expected.

THE FALLOUT: At the end of September, Netflix ( NFLX -news - people ) predicts it will have 24 million U.S. subscribers. That would be down from 24.6 million at the end in June. It will be only the second time in Netflix's history that the company's customer count has fallen from one quarter to the next.

MARKET REACTION: Netflix shares plunged by about 19 percent.


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Netflix stock tanks after cutting subscriber outlook

Online streaming site Netflix told investors Thursday that it has revised its projected subscriber numbers by almost 1 million following a controversial change to the company’s pricing plans.

In July, the company announced that it would change its pricing structure and no longer offer its popular joint streaming and DVD-rental plan, opting instead to split unlimited streaming and DVD rentals into two different tracks. The decision upset customers and has clearly had an impact on the service’s subscriber base.

On Thursday, the company told investors that it had revised its subscriber projections, but stood by its choice to split the... [Read More]

Can Netflix still win when cable TV loses?

Ryan Lawler makes a very important point: even as the number of people living in poverty continues to rise, and median incomes have gone nowhere since 1996, the price of cable TV just goes inevitably and inexorably upwards. Which is a nasty dynamic, since cable companies make a huge proportion of their money by selling their service to the poor. A whopping 40% of US households spend all of their income on food, shelter, transportation and healthcare, leaving nothing for the modern necessities of cable TV and phone service.

While Gawker’s Ryan Tate sneers at “Netflix’s entitled yuppie customers”, then, the reality is that a huge reason why the Netflix stock... [Read More]

Netflix sees Mexico profitability in two years as Latin America launches


Netflix is now available in 43 Latin American countries but expects to lose money there for a while.

At a news conference Monday in Mexico City, Netflix Inc. Chief Executive Reed Hastings celebrated the online video service's launch in that country along with the rest of Central America and the Caribbean, except for Cuba. It debuted in Brazil on Sept. 5 and the rest of South America on Sept. 7 and 9.

Hastings said at the news conference that it would probably take two years for the company to reach profitability in Mexico. "We are going to lose money for a while," he said, according to Reuters.... [Read More]