Netflix slashes subscriber estimates after price bump

Sep 15, 2011
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Netflix slashes subscriber estimates after price bump

Back in July Netflix made a big move to charge customers more and split the streaming and mail-order movie business' apart. The customers of the service didn’t take to kindly to the splitting of the services and increase in price. The backlash for Netflix was significant. Netflix offered up a guidance update for Q3 recently and it is apparent that customers of Netflix have spoken with their wallets.

The streaming movie company has been forced to reduce (PDF) its domestic subscriber estimates compared to what they were back in July before the price increase. In July, Netflix predicted 22 million streaming customers and 15M DVD mail-order customers. The current expectation has been reduced.

Netflix now expects 21.8 million streaming customers total and 14.2 million DVD customers total. The change isn’t huge, but at least the company is seeing the results of price increases. Netflix states that despite the change in subscribers it still feels the change was the correct long term choice. The company still maintains that the choice was the right one for taking care of customers and shareholders over the long term.


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