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Netflix Stock Price Tanks As Customers Quit Over Higher Prices (theverge.com)
An anonymous reader writes: Netflix released its earnings report (PDF) for the second quarter today, where it reported $1.97 billion in revenue and net income of $41 million. The company did however report only 1.54 million subscribers, which is below its projections of 2.5 million new subscribers. As a result, stock is down around 14 percent in after-hours trading. "Our global member forecast for Q2 was 2.5m and we came in at 1.7m. Gross additions were on target, but churn ticked up slightly and unexpectedly, coincident with the press coverage in early April of our plan to ungrandfather longer tenured members and remained elevated through the quarter," Netflix wrote. "We think some members perceived the news as an impending new price increase rather than the completion of two years of grandfathering." The company defended its price hikes, writing that "while ungrandfathering and associated media coverage may moderate near term membership growth, we believe that ungrandfathering will provide us with more revenue to invest in our content to satisfy members, thus driving longterm growth." In the past, Netflix gained 13 million new subscribers in 2014, and 17 million in 2015. Comcast will reportedly allow Netflix onto its X1 platform, which may entice more customers to the streaming service.
The real reason for people leaving Netflix is the blocking of VPNs and proxies and the dull nature of Netflix original content.
In the free world the media isn't government run; the government is media run.
I pay $9.50 a month for Netflix and it is better than either HBO, Showtime or Starz. If they jumped up to $12. per month i would not blink an eye. Meanwhile my cable bill is $220. per month.
Likely their crackdown on VPNs and foreign subscribers has also contributed somewhat to the churn.
If they'd let paying customers, you know, be paying customers then maybe they'd be in a better position now.
Pay attention to the summaries, you nitwit!
"I don't know, therefore Aliens" Wafflebox1
people left due to there shrinking library months of the same stuff may 1 or 2 new movies etc. yes they do do original stuff most of it pretty good but once you put it out people see it theirs no retention left. and as some people said blocking them from viewing threw vpn etc.
Of course that's not the real reason. It's because they are actively blocking out paying VPN users because rights holders are pissing their pants at finding out there's no real border on the Internet.
Not because of the price, but because of the lack of content.
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netflix is just a paid content pusher. nothing new .
it has no real original content, just formulaic stuff and old stuff.
it has no new technology.
it is no innovator.
it employs only a small number of techies.
so why is it here?
for acquiring new customers. I live in Seattle, and I don't know anyone with a connection fast enough to stream Netflix.
Netflix is at $85 after this big after-hours drop. On June 27, they were...$85.
Technical traders (the ones who use charts to predict, no matter the news) will buy like crazy tomorrow.
You are welcome on my lawn.
Who's paying that much per share when net profits are $41 million on almost $2 billion of revenue*? On top of it, management continuously dilutes shareholders by issuing new shares: https://www.wolframalpha.com/input/?i=NFLX+shares+outstanding
*Assuming this is real profit, and not Silicon Valley non-GAAP bullshit profit. I'm drive-by posting and don't have time to review the financials.
I seem to remember being told at the time that as a current subscriber I would be able to keep my current rate for a rather long period of time...ah yes here it is 5/9/14 "Hi user,
In order to continue adding more movies and TV shows, we are increasing our price from $7.99 to $8.99 for new members. As a thank you for being a member of Netflix already, we guarantee that your plan and price will not change for two years.
You can review your membership details at any time by visiting Your Account. As always, if you have questions, we are happy to answer them. Please call us at any time at 1-888-357-1516.
â"The Netflix Team"
So a bunch of people just forgot they had a very generous 2 year warning of a price hike and were caught unawares? I wouldn't call it ungrandfathering as It was a time limited price guarantee.
Ungrandfathering is when the city decides your house built in the 1850's is too close to the road and must be demolished in 2016 dispite being grandfathered in on the new rules in 1975.
Minimum threshold fixed. Thanks!
Darn! I wish I was a customer so I could quit too.
Vocês mexem com o Deus do amor, manipulando as pessoas como bonecos, agora não sabem porque vivem rodeados de bastardos e amantes. Eu que não vou entrar em avião gangster, pra virar babá de debil mental. Estou só procurando emprego pra arranjar dinheiro, não alguém que só tem cabeça pra gastar essa porra.
December, when I made my annual "where the hell is my money going" study, realized Netflix had nothing I wanted to watch. Except for House of Cards, but considering I could get the DVDs 6 months later for free from the library kinda made the decision easy.
Honestly, they almost never have movies I'm looking for and I don't want sitcoms or series TV. I felt I was getting sick of paying the $8/month for nothing, so I decided I certainly won't be paying $10/month for nothing. Back when I started the service, they had a really great library of movies via. DVD rental... now, I'll spend the few bucks a week and go pick up a Redbox movie. *shrug*
People are bailing on Netflix due to content restriction and the killing of VPN. Still more economical than YouTube RED!
My understanding is that ungrandfathering is when you go back in time and kill your own grandfather causing you never to be born. The universe resolves the paradox by imploding. Despite this price, some people wish certain politicians and celebrities could be ungrandfathered.
and I didn't quit, but I cut it back. Honestly I could cancel the dvd plan and wouldn't notice, but certain members of my family insist on having it (even if they barely use it, go figure).
Hi! I make Firefox Plug-ins. Check 'em out @ https://addons.mozilla.org/en-US/firefox/addon/youtube-mp3-podcaster/
Do what I did. My place went up a lot in value because of the new light rail station near my house on McClellan, so I sold it and moved to the Bay Area. I went from dialup to 1 Gbps at home. I am so much happier now after getting the hell out of Seattle.
I dropped Netflix when they wanted to increase my $9 grandfathered plan to $36. They didn't give a crap that I had been a loyal customer since 1992... . So they deserve it. The customer isn't always right, but you have to ease them into your new business model. They don't understand that. The corporate culture there is too arrogant.
The price is only like $10. That's fucking NOTHING. That's a hell of a deal.
The problem is that they aren't using the money to buy more content. They're using it tio MAKE more content. And 70% of their content is shit. I mean, they blew how many tens of millions or even hundreds of millions to give fucking Opera Man guy a six movie deal?! And then all the money they wasted on Sense8 and all these shitty millenial "sit-coms" full of retards. And then you have the other shit, like that Kimmy Schmidt retardation.
I mean... stop creating your own dumb shit. Just build your library of content. That's all I want. Give me a service where I can easily and cheaply access all the content out there. if I wanted to pay $15/mo to primarily just get one network's original content, I would fucking pay for HBO.
Is fear and greed. The fearful will be selling into unnecessary mania, created by an after-hours market with questionable liquidity. The whole "event" is a designed opportunity to create trades. The market profits with the increased volume. The event becomes news and the media gets their share. The market makers make it on the spread and volume. The sharks get fed by the minnows. The institutions filter-feed on the buying opportunity created by shaking out of the fearful.
And so it goes until the "next" news opportunity arrives for the news to sell.
Quite honestly the chart shows a strong long that the institutions will surely be happy about. But what do I know?
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The real reason for people leaving Netflix is the blocking of VPNs and proxies and the dull nature of Netflix original content.
These are valid points to some extent. Netflix's original content isn't that bad, but the fact is that they were formed as a content distributor, not a content producer. And that's the real problem... they have no content to distribute. Netflix has jack shit to watch, whether you have a working VPN or not.
This really hit home about 5 minutes ago when I ran across http://www.cinesift.com/ via a link on HN. Look for the red "Netflix" buttons and you'll see maybe one or two in the first several dozen listings. Those are among the highest-ranked films of all time, across numerous genres. Almost none of them are available on Netflix. Meanwhile, Amazon Video lets you access almost all of them.
If Netflix is going to survive, they cannot simply rely on offering a pathetic assortment of B- and C-level movies for a flat rate of 12 bucks a month or whatever. What they are doing is not working, and it's time to stop trying. They have to start offering optional premium content. I see no other strategy that will keep Netflix from being destroyed by more clued-in players, including but not limited to Amazon.
They do have great content, but for Sense8 I gave up after that scene where they zoom on a dirty dildo. I'm all for creative freedom and I appreciate that they depicted all kinds of lifestyles, but that scene was just a cheap attempt at creating some kind of buzz. I don't mind graphic scenes but I do mind feeling like my "queer sex tolerance threshold" is tested on purpose, I find that insulting and condescending.
lucm, indeed.
It's just a step by step process to tier their user base into premium vs. regular customers. First it was the ungrandfathering, whatever. Next it'll be movie releases into buckets -- the premium get their access first, regular later, etc.. Maybe not for House of Cards or similar hits, but for the next hit series, you'll end up paying ala-carte for those too.
She's just one member of the city council. The rest are also to blame.
Whether you raise my rate because of an "impending new price increase" that you disclaim or "the completion of two years of grandfathering," the result is that you are requiring me to pay more now, so it is the same either way for the consumer, duh. Of course the price increase is minimal and not my main reason for cancelling service last month, but it surely doesn't improve my experience. I cancelled my account mainly because Netflix is soooo ungodly slow to add new content, and I have long since burned through most of what I was initially interested in (I'm picky and don't just watch everything that is available). It also doesn't help that the interface on my Android media box is so incredibly awful with a remote, but it is more about the lack of stuff I want to watch.
If I really want to dig to find something unspecific, I have an Amazon Prime account, albeit mainly for other reasons. I'm mostly content with free OTA TV, Prime, and an occasional torrent or Redbox rental, and I subscribe to Sling TV during the NBA season. So Netflix, if you don't give me any compelling reason to subscribe to your service anymore, I won't. AT&T (evil) now suddenly enforcing limits on my downstream traffic sure doesn't help your case.
This is a hacked account, for which the owner can not be held responsible.
not because of price, I'd even pay $15 per month but because they blocked my VPS/DNS service. So I cut off their access to my CC. Guess what I don't even miss it. The kids had a hissy fit but I told them hey go ahead and pay for it yourself and all of a sudden no one cared at all to have Netflix.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
"We think some members perceived the news as an impending new price increase rather than the completion of two years of grandfathering"
AKA price increase
That makes me feel MUCH BETTER. Their prediction of growth was much too high, but now they're predicting their other predictions will be much more accurate.
This from the company that brought you Qwikster... "The worst product launch since New Coke"! Launched in the tenth paragraph of a blog post from the CEO apologizing for some previous poor communication.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
She is a socialist so of course she stands against free dissemination of information.
I don't mind the extra dollar or two. The constant raising of the prices is getting maddening though. For me, the real kicker is when they start removing services that I pay for and offer them as add-ons. We cut the cable years ago and often watch up to 2 netflix streams at once, with the occasional 3rd when I travel. What really makes me mad is the new "sharing passwords is a felony" bs. I do not share my passwords but this makes me mad because they used to allow 4 devices, then knocked it down to 2 with the addon package to allow 4. So I PAY extra to allow 4 devices. I PAY for that. So don't charge me to have 4 devices and then tell me I can't use them. That's like me buying 4 baseball tickets and telling me that I can only bring my immediate family who live with me. GTFO with that nonsense.
I suspect the cancellation of Costco AMEX led to many cancellations as well. Netflix couldn't auto-bill us, and I didn't bother to give them new info.
So they make 2% profit. That is pretty pathetic. how is this sustainable? Their costs are so ridiculously high, that if thier income falters for a second they would need to declare bankruptcy.
Troll is not a replacement for I disagree.
"our plan to ungrandfather longer tenured members"
Could someone explain this for the foreigners in the audience? I'm guessing Netflix don't come round and kill gramps if you're late with the payments but it's a doubleplusodd addition to the Newspeak vocabulary.
There's a Fairport Convention album called Unhalfbricking (something to do with walls?) but I don't think that's connected.
I'd like to promote the concept of "piracy". We need to eliminate the concept of copy"right". It's destroying our democracies. We get censored and abused by these thugs who don't deserve one cent. Artists should be paid like waiters. If they want a tip provide me good content. Copy"right" was sold to us on the basis it would promote the progress of science and useful arts via restrictions on distribution for a limited time. That limit was 7 years!!!!! Copy"right" today doesn't end in practice. I'll be long dead before I can access anything that is copy"right" without asking for permission. No. We need to end copy"right" and instead respect peoples actual rights and freedoms to be free from tyranny. I get property rights. ACTUAL property. I don't believe in copy"right". In any other context a monopoly would be illegal. Somehow they convinced us that it's OK to give corporations a monopoly on "art" and "science". This is utterly wrong morally.
My TV broke, so screw it.
Exceeding the recommended torque is not recommended.
It was the effective geoblocking and the fall in content that caused the people I know to quit their service.
Netflix get this!
I speak for myself. But perhaps other consumers might have similar expectations.
I hadn't the slightest objection to his spending his time planning massacres for the bourgeoisie... (P.G. Wodehouse)
Get the stock during a momentary dip in price! It will recover before too long.
than people realize. There are billions of dollars available to finance good ideas, but
unfortunately We are Out Of Good Ideas. I don't quite know what that means in
the long run. Is this As Good As It Gets?
I have cancelled my Netflix subscription because of the price increase, but more specifically, I rarely use Netflix these days. I'd spend months not watching Netflix, it seemed a little pointless to spend more on something I'm not using.
The price increase just means that I'll subscribe to it when there is something to watch. Seeing now that I won't even check Netflix to find something to watch because I won't have a subscription, that seems unlikely.
Change is certain; progress is not obligatory.
Season 3 of Bojack Horseman. Can't wait to binge through it! Admittedly, it has been a while since I've watched anything on Netflix (or anything else on TV), so that maybe part of their problem too.
Grandfathering is ambiguous enough, make it un-grandfathering and people are going interpret it dimly.
Bandwidth costs are falling, Hardware costs are falling, subscribers prices are increasing, why is this? If you increasing your subscribers, the marginal cost of content should be decreasing, the price should not be rising.
In the UK Sky TV is suffering a similar fate, falling subscriber numbers, so they push their prices skywards (pun intended) and losing more subscribers in a vicious circle.
The movie selection in Eastern Europe is terrible. I would gladly pay Netflix 20$/month for a good film selection. However, this is not the case - the local Netflix has about 10% of the US Neflix' selection at 50% greater price.
They seem to be intent to not get any paying customer. Why do it, then ? As it stands now, people here prefer pirating all the films they want to view.
Most would be happy to pay (for the convenience and for the quality), but there is no serious offer. Netflix outside the US is a sad joke.
When you visit Netflix you cannot see a list of content. This makes it extremely unattractive to new subscribers to impulse subscribe to be able to access something specific. Yes I know we can 'Join for Free Trial' yada, yada, but it is a barrier and too many people have been caught out too often with unwanted rolling subscriptions. I'm no fan of Amazon Prime, but at least I can see what they are actually offering me for my money.
As ridiculous as it is that so many people apparently quit (I find it hard to believe), they'll bounce back soon. There is no better value in video entertainment period. $10 for seemingly endless content on nearly any device via an ultra reliable platform is a steal. My heard goes out to those who can't cheat the location restrictions anymore (not).
I'm an outlier. Here's why:
I'm far enough away from our metro center here in a large US market that we don't, and won't anytime soon, have broadband. It's already bad enough to have netflix in low res, but gettting the 'loading spinny thing' , many , many times during a show isn't acceptable. I'm stuck with the mix of directv high cost, and the free OTA hi def.
Would love to have the issues raised her re value for the $.
Netflix with give us more tried and true content. Least expensive alternative compared to creating more original content.
In your face Netflix
Why some of their content is ok, there are many items that I try to search for and either is not found or is on dvd only. If they hike one more time I will leave.
WTF? Corrupt capitalists never stand athwart the free exchange of data?
get a clue, idiot.
I deleted mine after the VPN witch hunt. The Canadian Netflix had nothing of value to watch. Maybe updated with new stuff quarterly. Any time I searched for something they didn't have it. Went back to torrents.
NetFlix library of content is shit!
NetFlix lying recommendations of hot and trending shows, from 1962 because I watched a single Cray Grant movie two months ago, is SHIT!
Want to keep pulling $12 per month out of my pocket. Get new or recent A and B grade films (not D and F) in 4K. Keep trying to feed me some crap from the sixties and an oddball Original series and you're canceled.
The thing that I find odd is that I've been saying more or less the same thing about NetFlix since a few years ago when I signed up. But, people still gush about how great NetFlix is. These people enjoy pure shit and complain about cable?
People are quiting over higher prices, less selection, and crappy content.
Their pricing allows for first tier content. They provide shitty second and third tier content, reduced their selection, and raised prices. The CEO is a fucktard.
Why does anyone want to get this content from a middleman? What's wrong with Netflix selling you only the "Netflix original" shows, NBC selling you theirs, HBO selling you theirs, etc? There's no reason anyone should want to get Hollywood's show from Netflix or Amazon. It's just going to be marked up. You have The Internet now!! You can communicate with anyone. Deal direct.
Turns out there's answer to the above question: because most people are still using these stupid proprietary applications, instead of standard interfaces, to watch TV. So if you personally had a dozen TV vendors, then you'd have to switch between a dozen apps, and that's going to totally suck no matter what. Even if someone's app is ok (and that's usually about as good as they get, huh?) you still can't have Netflix shows on the same alphabetical menu as Amazon and HBO shows.
(Unless you pirate, because once the content is liberated, it has a standard interface, which means you can pipe to any interface you want.)
So fuck 'em. Standard interfaces or else No Sale. (And seriously: is a standard interface such a burdensome thing to ask?! Can you think of any endeavor where it's not considered both the ideal and the common-sense way things should be?) If a vendor can get onboard with doing things right, they can get paid.
But if they say "use my software" (sometimes disguised as "use my box" or "use one of these supported devices" but we're computer people so we know this hardware is just for running their shitty software) then they are trying to create one of two futures:
Both are absurd dystopias that you can't possibly want. Netflix is currently just changing their blend between these two hells, and I guess people were used to the devil-they-knew. But what you don't hear anyone talking about, is Netflix actually trying to solve the problem, because nobody's making them do it. So stop paying them until they'll sell you the .mkvs. (Or standard streams, if you're convinced that local storage is just too .. expensive? Ok, whatever, an argument for another time.)
As copyright owner of this comment, I authorize everyone to defeat any technological measure which limits access to it.
Is it even a price hike, after being adjusted for inflation?
Competition Good, Monopoly Bad.
$8 a month was fine while everyone else was paying $10 a month, but as soon as grandfathered subscribers found out they would no longer be grandfathered in with the $8 a month then all a sudden Netflix charges exorbitant prices.
if i ever get a severe brain injury maybe then ill get into watching fat guys standing around & doing nothing.
But until then the NFL, MLB, etc has absolutely no appeal to me whatsoever.
Honestly, i dont understand why you cant record just one game & just watch that tape over & over. Its the same boring shit every time, how would you know the difference?
Are they just assuming people canceled because of increased price? Because that assumption might not be entirely right.
I recently canceled my Netflix account, but price did not factor into my reasons. In terms of the service you get for the dollar, Netflix could have doubled their price and it would still be a very good value.
as I'm the one who showed them how to.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
what. the. hell. is ungrandfathering?
"Invisible hand"?
BWAHAHAHAAA
I'm thinking about a 6 month or so "cancel" vacation like I do with HBO Now. Once you've binged through everything you want to see there's really no good reason to just let it keep auto billing. The fact that they're increasing the price without increasing the value makes it all the more attractive.
My subscription price didn't go up - people that had lower prices because of grandfathered rates that expired saw their subscription price rise to what everyone else pays. That doesn't really seem like a price 'hike' as much as the end of a discount.
The reason??
The good stuff is going away and what's left is crap MST3K wouldn't even send up.
The problem with Netflix is market fragmentation which is due to content creators and licencing. The more original content they make the better. When Netflix was totally dominant it wasn't so bad as either you had a licensing deal or you did not. Now that every telecommunications company is trying to pimp their own "streaming service", they shop around, or have exclusive deals to try to attract users.
The impending release of the New Star Trek is a perfect example. The entire world gets in on Netflix. Oh except in the US where the licence is owned, or in Canada where the thing is being filmed. In those countries, you have to use the CBS streaming service whatever the hell that is, and in Canada you have to use the Bell streaming service.
Kick. in. the. balls.
Personally, it isn't a big deal as I *also* have cable, and it will be showing on the Space channel which is Bell owned. However it is the principle of it that pissed me off. Before I saw that I could watch it on a channel I already get (hence I will Tivo it), my thought was, if ever there was content to pirate and screw the content creators and have no moral objections to it at all and no sympathy to anyone for anything it would be that. Just such a jerk move.