Netflix Loses 810K U.S. Subscribers In Third Quarter
Netflix, Inc. (NASDAQ:NFLX) has lost a lot of subscribers due to a price hike and after they separated their streaming and DVD businesses. Netflix ended the third quarter with 23.8 million subscribers in the third quarter, which is down about 810,000 subscribers from the quarter before. Netflix forecasted their subscriber base to be at around 24 million.
In the past quarter, Netflix CEO Reed Hastings had announced a separate DVD rental company named Qwikster, but then decided not to launch it after a few weeks. Netflix CFO David Wells wrote that the “primary issue is many of our long-term members felt shocked by the pricing changes, and more of them expressed that by canceling than we expected.” Netflix’s revenue and profits in the fourth quarter will be lower than expected as a result.
Only about 7% of new subscribers signed up for a combined streaming and DVD plan. Less than half of all streaming subscribers also pay for the DVD-by-mail plan.This article was written by Amit Chowdhry. You can follow me at @amitchowdhry or on Google+ at +AmitChowdhry