Netflix revises subscriber estimates

Netflix is crashing and burning in pre-trading as the company just released a statement to shareholders that cut forecasted subscribers by 1 million users. This comes after Netflix started rolling out new plans that effectively jacked prices up 60% for the most popular plan. As of this posts writing, Netflix is down 15% and falling, almost erasing the company’s stellar 19% growth over the last year.

The new estimate puts the company’s DVD-only subscriber count at 2.2 million, down from the previous projection of 3 million. Netflix’s streaming subscribers are now estimated lower as well, pegging in at 9.8 million rather than the old estimate of 10 million.

Netflix stated they expected losses after rolling out the new plans. But they clearly didn’t expect this type of backlash. However, as stated in the letter [PDF], while they highly regard its customer’s opinions, the company still feels they made the right decision separating the streaming and DVD business. This allows the now separate divisions to focus on their part of the business without dealing with the other as in global streaming services is no longer tied to domestic DVD business and so on.

Change is hard and Netflix’s stellar success from turning from start-up to superstar is commendable. But now that they at the top, if you will, the big kid on the playground, its history will be wrote with how it proceeds from here. No doubt a short term goal is to recover the recent lost subscribers while increasing its DVD and streaming offering. As a bored Netflix subscriber myself, content is king and, well, the streaming library isn’t getting any bigger.

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