Netflix recently had the bright idea of introducing a big stealth price hike. Profits soared! Actually, no: Netflix stopped growing due to cancellations, cut its subscriber projections, and the stock is down 17 percent so far today.
Netflix is sticking by its financial projections for the current quarter. For now. But it has cut its subscriber projections for this quarter; instead of growing to 25 million total U.S. subs, Netflix will only hit 24 million, or slightly less than the 24.59 million subs it ended last quarter with. That would mark the first quarter in at least two years when the popular video streaming service failed to add subscribers. The decline is driven by people cutting DVD subscriptions, but projections for online streaming subscriptions fell a bit, too. (See the chart below.)
Netflix's entitled yuppie customers are royally pissed off by the price hike. And we totally get that, because it was slimy of Netfix to dress up a 60 percent increase on its most popular plan as a cut (on a plan no one uses). Still, it's at worst a $6 per month bump, which is basically what your cable company charges just to insure the little TV box you must rent from them in order to buy their service. For $16 per month, Netflix will instantly show you any number of movies and TV shows at the click of a button, and if there's a movie not in their library they will mail a DVD of it to you. Many of us obnoxious judgmental techies have become jaded about this small miracle, but it's still very cool, and Netflix is going to be fine. Assuming the company learns to frame bad news more honestly.
[Top pic via Getty. Chart via Netflix.]