Did Netflix Jump From DVDs To Streaming Too Soon?
Netflix is losing more than it expected from the backlash over its recent price hike. The company is revising its third-quarter projected U.S. subscriber numbers downward from 25 to 24 million, according to a letter to shareholders (here reported by AllThingsD’s Peter Kafka).
To put this in context, look at Netflix’s corresponding numbers from its second quarter shareholder letter [PDF]. Netflix had 24.59 million US subscribers at the end of the second quarter (and only about a million more everywhere else). The company began 2009 with 10 million subscribers, and for two years has shown year-over-year subscriber growth between 26% and 64%, with profits to match.
Netflix’s executives thought its price hikes would mean slower subscriber growth for the third quarter only; many customers would switch plans, and it would lose older DVD-only subscribers, but offset them with new streaming ones. It didn’t think it might actually lose net customers. Independent analysts were less certain. Netflix’s revised numbers are better than these worst-case projections, but close to the middle of the field.
Netflix is well on it’s way to reaching EOL. More bad news from a once-great service.