Netflix, which instituted a price hike earlier this fall, says the higher costs are turning off more customers than it expected. The video rental company has cut its third quarter U.S. subscriber projections from 25 million subscribers to 24 million, a 4 percent cut. The majority of the shrinkage, Netflix says, will come from its DVD-only customers.
Netflix says the subscriber cut won’t affect its financial guidance. In a brief note, it defends, again, its reasoning
The strategy behind the split of our services is four-fold:
(1) to create a dedicated DVD rental division that takes pride in great execution and maximizes the
opportunity for disc rental over the coming decade;
(2) to enable us to improve our global streaming service even more rapidly, because it is not
meshed with a domestic DVD business;
(3) to enable us, with the growth in revenue, to license more streaming content and thereby
improve our streaming service even more;
(4) to remain very price aggressive, with $7.99 per month for unlimited streaming of a huge library
of TV shows and movies, and $7.99 per month for unlimited DVD rentals, 1 out at-a-time.
We know our decision to split our services has upset many of our subscribers, which we don’t take lightly, but we believe this split will help us make our services better for subscribers and shareholders for years to come. Here is the full story Right Here
Netflix, Inc. (NFLX) is trading back near $175 in premarket because of Netflix Sees 3Q Domestic DVD-Only Subscribers 2.2M, Down From Prior View that reason stock got hammer today. Netflix Inc (NFLX) will have resistance located at $200 going forward. Netflix Inc (NFLX) is a buy below $170.Netflix Inc (NFLX) will have support area $180.Netflix Inc is a buy on pullbacks below $170 any market correction.
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