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Netflix Lowers Subscriber Projections, Stock Plummets

Is this what jumping ship looks like?

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Netflix Lowers Subscriber Projections, Stock Plummets
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Today, Netflix sent out a letter to its shareholders that discussed Q3 expectations. In that letter, they announced that they are lowering their domestic subscriber estimates.

By one million users.

And the bulk of those users that Netflix expects to flee are subscribers to the DVD service. There, they project a lost of 800,000 subscribers. As far as streaming service subscribers, they project a loss of 200,000.

It’s pretty easy to draw a connection between this new projection and Netflix’s big move back in July to split the streaming and DVD plans into two separate entities, basically raising the prices for anyone who wanted to keep both. That plan went into effect September 1st.

That decision sparked an internet freak-out, as people took to blogs and social media and swore to the heavens that they would be cancelling Netflix and wishing a plague on the house of Reed Hastings. The backlash was severe, to say the least. An independent analysis group guesstimated that this move could cost Netflix 2 to 2.5 million subscribers.

And now we see Netflix lowering its domestic projections by about 4%. Is this really nothing to worry about, or has Netflix screwed itself?

Apparently, investors aren’t too thrilled about the new estimates. At midday today, NFLX stock dove 17%.

Here’s the letter to shareholders (Thanks Hacking NetFlix)

On the day that the new prices went into effect, Netflix dropped another bomb: They will be losing all of their Starz content early next year. Negotiations to renew that contract stalled as Netflix refused to give Starz a tiered subscriber format within their service.

Netflix Lowers Subscriber Projections, Stock Plummets
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  • Joe H

    Looks to me that this is a great time to buy NetFlix stock. I still stream from NetFlix but I did drop my DVD by mail. The price increase was one reason the other was the post office. Where I live the post office has become more unreliable and slower then ever. I will continue to stream from NetFlix there is more TV there then we can possibly watch.

  • http://aidyspoetry.net Aidy P

    I think losing Starz programming/movies is a big concern for Netflix. The majority of the best films on streaming are Starz films. Hope Netflix have things figured out by now…it seems they are going to take a bigger hit down the road.

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