Netflix Stock Price Tanks As Customers Quit Over Higher Prices (theverge.com) 460
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 price hike is minimal... (Score:5, Insightful)
The real reason for people leaving Netflix is the blocking of VPNs and proxies and the dull nature of Netflix original content.
Re:The price hike is minimal... (Score:5, Informative)
Not to mention the inconsistent availability of third party content. Movies and shows get pulled seemingly at random, which is especially annoying if you are mid-season.
It used to be better than torrents, not so much anymore.
Re:The price hike is minimal... (Score:5, Insightful)
IKR one of the things I hate the most is when they have missing seasons like season 1 2 3 x x x 7 x 9
Its almost as bad when they have a series with missing episodes. 1 2 3 4 5 6 x 8 9 10 11 x 13.
And why didn't anyone think to deinterlace star trek? its not the only one but thats a lot of screwed up episodes.
Re:The price hike is minimal... (Score:4, Insightful)
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Re:The price hike is minimal... (Score:5, Insightful)
Netflix would love to have more content, and especially better content. Its Hollyweed wanting to create an artificial scarcity of content to keep licensing fees far too high that is the problem... If Netflix could double the amount of QUALITY content that could be streamed from them, few would care if the price doubled! The reason for the content disappearing and missing seasons or episodes are licensing issues. Hollyweed is too greedy and thinks that their content is worth far more than it really is worth. Hollyweed and their crap licensing terms and high license fees are why we don't see more quality content on all video streaming services.
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Yeah, but see the thing is, nobody cares.
Re:The price hike is minimal... (Score:4, Interesting)
Voting the parent a troll seems rather unfair. It's a pretty accurate summary of the problem for Netflix: the gaps might not be their fault in some cases, but they're still the ones asking their customers for money and providing a disappointing experience in return.
I'm a little surprised they aren't in a position to play hardball in some of these cases. There aren't that many places that are going to show reruns of older TV shows and generate significant extra licensing revenues from it, and it seems like if they insisted they would only work with rightsholders who would licence shows in their entirety on a long-term basis, they could turn that into a marketing advantage over any competitors who did not.
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How exactly can they play hardball when they don't 'own' anything but their subs? While novel, there's nothing all that unique or profound about the platform itself.
Subs aren't that hard to gain (or lose) in large quantities. Especially millenials are quick to dump for the new trend. Amazon, hulu, and plenty of others are ready, willing, and eager (and trying) to take over the space themselves.
Unless I'm mistaken, netflix is in AWS so amazon obviously has the capacity to server up everything that netflix
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It's Hollyweed wanting to create an artificial scarcity of content to keep licensing fees far too high that is the problem.
Funny, that doesn't seem to be stopping Amazon. [cinesift.com]
Enough excuses from Netflix. Sign some deals, or go away already.
Re:The price hike is minimal... (Score:5, Insightful)
Amazon is still a wannabe player in the market. It's big market segment is people already subscribed to Amazon prime, they're not getting a lot of new customers. Their selection is really terrible, and if there's something good then chances are you may have to pay extra for it above and beyond the subscription.
Re:The price hike is minimal... (Score:4, Insightful)
Their selection is really terrible, and if there's something good then chances are you may have to pay extra for it above and beyond the subscription.
No, their selection is most definitely not "really terrible."
But yes, you typically have to pay a couple of bucks to rent access to A-list movies for 48 hours. But at least you have that option with Amazon.
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No, their selection is most definitely not "really terrible
Seriously? Don't know what you're watching, but from my POV, it sucks. I only get it because of my Prime membership
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Their selection looks pretty bad to me. Worse than Netflix.
Pay-per-view offerings don't count.
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Amazon have a ginormous online retail business to support their efforts to enter the market. It doesn't matter to them if they make a profit for a while, so they can overbid and make a loss.
For Netflix, it's their core business.
Re:The price hike is minimal... (Score:5, Informative)
You have to pay extra for a lot of the stuff on Amazon. For example, they have Dexter, but it's £2.50 per episode (!) where as on Netflix you can stream every episode as part of the subscription price. On Amazon it's actually cheaper to buy the physical box set, rather than their DRM-crap-laden download.
If you compare what Amazon has available for streaming their library is even worse than Netflix's.
Re: The price hike is minimal... (Score:5, Interesting)
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Re: The price hike is minimal... (Score:4, Informative)
'Without ads' is important to 74% of netflix subs according to a survey last month that showed they'd drop the service if it introduced ads.
http://bgr.com/2016/06/22/netf... [bgr.com]
I know it's /. but I'm still pretty sure that 74% represents 'most'.
Re: The price hike is minimal... (Score:5, Insightful)
"Pause" is an even better time, though. And strangely, it's always exactly the correct amount of time, and happens exactly when you want it to.
Ads are a surprisingly shitty time to do something else, because they don't happen on demand and don't happen for the correct duration. On top of that, they make annoying noise.
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Re:The price hike is minimal... (Score:4, Insightful)
None of that is the fault of Netflix.
The reason the stock is down is that the primary market is full of people who already cut the cord once and won't hesitate to do so again if given a chance. Meanwhile Comcast can ramp up their rates and most customers just put up with it. But sheesh, granfathered in for 2 years at $8/mo and it goes to $10 a month, and they get angry even though they used to pay $80 or more a month.
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Re:The price hike is minimal... (Score:5, Interesting)
and the dull nature of Netflix original content
Different strokes. Personally, I'm loving their original content!
House of Cards
Orange is the New Black
Daredevil
Jessica Jones
Sense8
Marco Polo
Love
Peaky Blinders
and now Stranger Things
I've heard Bloodline is good, and Luke Cage is coming. Some of their comedy specials aren't too bad either. Ali Wong's "Baby Cobra"...I haven't laughed that hard in a while.
For me, it's been a long time since I've been this happy with video content. I recently ditched cable and I'm not going back. Netflix is, at the very least, doing it as well as most anybody else is and without the support of commercial sponsors.
How much time do you want to spend in front of a television anyway?
Sense8 (Score:5, Interesting)
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.
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Yeah, I agree that was over the top. There were more than a few times I felt Lana Wachowski was trying to make a statement. Still, I liked the show. I felt the cast did a great job, and the location work was really pretty phenomenal. You don't often see a television show being shot in eight different countries.
Re:The price hike is minimal... (Score:5, Informative)
Peaky Blinders is original content? Might want to tell the BBC. Exclusive, maybe (except it is on iPlayer)...
Missed one (Score:3)
Re:The price hike is minimal... (Score:5, Insightful)
Yeah all those ones you mention, I find pretty dull. Especially Dare Devil and Jessica Jones, normally I love action hero stuff but those just bore the pants off me. I tried Stranger Things recently, couldn't get past the first 30 minutes.
Maybe I'm just strange.
Even if you don't like these programs, the positive reviews from both critics and viewers objectively show they are quality content. If you had originally said you stopped watching Netflix because of dull original content that is your opinion, but claiming people are leaving Netflix because of that is simply objectively wrong. I'm not saying no one leaves because of dull original content, but clearly that is not a major driving factor.
I find it more likely that emails notifying users about the price hike reminded people they were paying for Netflix when they were never using it. I've worked at two subscription based companies which avoided reminding users of their service like the plague since it only incited some users to cancel (I don't condone the practice, and yes one of the companies is bankrupt now).
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Jessica Jones dull? David Tenant plays one of the most vile and twisted villains I've ever seen.
Re:The price hike is minimal... (Score:5, Insightful)
Unfortunately I find David Tenant utterly detestable.
If that is the case then you REALLY need to see Jessica Jones.
Re:The price hike is minimal... (Score:5, Insightful)
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Don't worry, it'll soon tank further as they'll require MS Edge to show 1080p content and that's just NOT gonna fly.
They basically blocked people outside the USA, hoping we'll pay 80% as much for our local Netflix which has 20% the content, and now we lose 1080p too.
In 2016, the new trend is having contempt for your users and screwing them as often as you can. MS is the best example here.
Back to TPB/KAT/whatever! They only have themselves to blame for the lost revenue.
Re:The price hike is minimal... (Score:5, Informative)
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My smart TV has always streamed Netflix at 1080p. Same most STBs etc. Browsers are the exception.
Anecdotal (Score:2)
Re:Anecdotal (Score:4, Interesting)
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).
That's the way it's always been for most people, which is how Netflix was so successful for its first stretch in the early 2000s. Only a minority of customers would receive and send back multiple DVDs each week -- most people would get some movie they were told was "awesome" and it would sit on a shelf for a month. I remember some comedian even doing a shtick about people who'd get all these "classic movies" from Netflix on DVD that they never would have been able to find at a local Blockbuster, but then they'd end up sending them back unwatched a couple months later.
"It's the content, stupid" (Score:3)
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.cines [cinesift.com]
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Unfortunately, Google and Amazon are still having their little dick-waving contest, so Amazon Video (and the prime "bonus") is pretty much useless on way too many devices that Netflix works (at least passably - they're too stingy with the HD device blessing, IMO) on.
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I'm not seeing that. In the top 20 films only one is available on both Netflix and Amazon Prime (Pulp Fiction) and then one is only netflix (Hoop Dreams) and one is only Amazon Prime (Apocalypse Now).
I suppose it's inevitable that Netflix will start offering premium content like Amazon, but once it's got a vast library that you can rent on a pay-per-movie basis their all-inclusive streaming selection will go from bad to worse.
Re:"It's the content, stupid" (Score:4, Insightful)
But you should be comparing "Amazon Prime" and "Netflix" since they are both all-you-can eat streaming services.
I think you are comparing "Amazon Video" which is amazons premium pay-per-movie model with "Netflix" which is unfair. Are you suggesting that Netflix should offer the movies that Amazon offer for payment as inclusive in their all-you-can-eat plan or are you suggesting they introduce a mixed model where there are some premium movies on netflix?
It's A Bargain (Score:5, Insightful)
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I pay $9.50 a month for Netflix and it is better than either HBO, Showtime or Starz.
I completely disagree. As soon as we got the email announcing our price will go up next month, we started looking to see if there's *anything* we want to watch that's exclusive to Netflix anymore.
The email stated that the price was going up so we could see "more of the shows you love"... then exclusively listed Netflx-produced titles. That's not why we subscribed in the first place, and I've yet to see a Netflix-produced show that wasn't mediocre at best (in my opinion).
My best guess is this will be our las
Re:It's A Bargain (Score:5, Insightful)
Food and gas, and even postage, are pretty much necessities.
A video feed is optional. If you must watch something on a screen (rather than, say, read a book), most public libraries these days have pretty good DVD collections.
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You really don't get it. Netflix is increasing its price while shedding much of the content we subscribed for in the first place. None of the situations
you listed is remotely comparable to that.
Re:It's A Bargain (Score:4, Insightful)
I agree with that. Also they started having incomplete series that get new episodes every week; when it gets to that point they're no longer in their niche of "a bit dated but binge-ready" and outside that niche they can't compete with HBO or even Xbox video.
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Don't blame Netflix, blame the content owners. How much do you think the price hike would be if they did not drop some content? It's obvious that even Netflix doesn't have the market clout to keep programming costs down or fight the region locking lobbies (VPN/proxy stuff).
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I wish you great comfort in your time of need, and great appreciation in your many times of comfort.
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Meanwhile my cable bill is $220. per month.
Wow, that's like a very expensive vacation more per year than I'm paying.
Is it sports packages? I hear people will pay a ton for their favorites.
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Meanwhile my cable bill is $220. per month.
Wow, that's like a very expensive vacation more per year than I'm paying.
What kind of "very expensive" vacation costs less than $2640? That's more like a reasonably priced vacation for a couple without kids.
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Yea people better watch it, I used to buy Netflix before I even watched it because it is a big deal, Netflix shows that people want streamed video over then internet and commercial free, you may never see commercial free shows like this again if Netflix fails somehow or gives up and starts commercials. Do not think all other entertainment options do not watch how Netflix does. for 9.99 Netflix is a super bargain, people do not know what they have till it is gone.
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>I pay $9.50 a month for Netflix and it is better than either HBO, Showtime or Starz.
That's not because Netflix is particularly good. It's because HBO, Showtime, etc are absolute shit nowadays.
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so, it's really a matter of relativity... I was with a friend, and I noticed he kept the extra, after a cashier gave him change for a hundred instead of the twenty he'd handed her.
After I admonished him from my high ground, he proceeded to brilliantly explain how the difference between good and bad food was only about 24 hours.
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He's actually a thief. I would have turned him in.
Re:It's A Bargain (Score:5, Interesting)
When we cancelled our cable, they wanted to raise what I was paying from $87 (for cable TV + Internet) to $137. I would be getting nothing extra in return. No faster speeds. No additional channels or features. It was just a $50 price hike for the sake of hiking prices. When I asked about the $99 promotional prices they were advertising, I was told those were for new subscribers, not people who had been with them for about 15 years. When I questioned why the price was so high, I was told that it was actually a "$150 value" so I was really getting a "great deal."
We canceled cable and now we're paying $35 for Internet plus $10 a month for Hulu. (We were already subscribed to Netflix and Amazon Prime pre-cord-cutting and would have kept those either way so those really didn't factor in.) After factoring in buying more DVDs and VOD content (from Amazon or Google), I figure that we were saving around $70 a month. After a year of cutting cable, our former cable company announced the usual round of large price hikes so we're saving even more now.
Re:It's A Bargain (Score:4, Insightful)
You make it sound like everyone's a sport nut.
And you'd be surprised how much news you can get from the internet.
Re:It's A Bargain (Score:5, Insightful)
So you now don't get any news or sports channels, how great.
Not getting FOX, MSNBC, ESPN, etc is a feature.
VPNs FTW? (Score:3, Insightful)
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.
Re:VPNs FTW? (Score:5, Insightful)
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.
Probably not their decision. Netflix would love not to have any regional restrictions. Content owners and governments have other ideas.
Re:VPNs FTW? (Score:4, Insightful)
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.
Probably not their decision. Netflix would love not to have any regional restrictions. Content owners and governments have other ideas.
They always make the claim they are against regional restrictions and exclusivity, but it seems all talk, they actually participate in the exact same licensing an exclusivity distribution deals with there own content. Basically they seem against regional restrictions only when it is not in their best profit interests. I say that as someone that likes Netflix and is a subscriber (though will disconnect as soon as my particular VPN provider stops working).
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I've canceled my Netflix and gone back to torrents. It was the total lack of screeners on Netflix that turned be off. Hell, screeners are great -- it's just like being at the theater. If I can't see the heads of those in front and hear cellphones ringing two rows back then it's not a true movie experience.
Damn you Netflix! :-)
1.54M NEW customers. (Score:5, Informative)
Pay attention to the summaries, you nitwit!
Re:1.54M NEW customers. (Score:4, Interesting)
Pay attention to the summaries, you nitwit!
Market economy depends on accelerating growth; not only must their subscriber base grow but the rate of growth must grow. The fact that rate of growth has declined is utterly terrifying to investors.
Re:1.54M NEW customers. (Score:5, Informative)
That's not at all what I'm referring to.
BeauHD wrote, "The company did however report only 1.54 million subscribers", which means... the company had 1.54 million subscribers. Obvious, right? But that's not what the article said.
This is nothing more than Yet Another Case of poor /. editorship.
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real reasion (Score:2, Interesting)
Re:real reasion (Score:5, Informative)
This story is not about people leaving. It's about them not getting as many NEW customers as they thought.
Of all the streaming services, Netflix has the highest member retention.
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How does that contradict anything I've said?
Netflix' total number of subscribers is up. They're growing faster than any other streaming service and retaining a bigger percentage of members. Despite churn.
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It contradicts exactly what you said
This story is not about people leaving. It's about them not getting as many NEW customers as they thought.
But they say:
Gross additions were on target, but churn ticked up slightly and unexpectedly.
That's literally the opposite of what you said. They are getting as many new customers as they thought, but people are leaving.
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I see what you're saying. Netflix still leads all streaming services in retention, though. But yes, unexpected churn was the issue. The year over year growth in total membership number still is on the same slope that it's been on for years. Since the stock price is now matching it's 30-day price low, after rising (and falling $14), it's still a screaming buy. IMHO.
Full disclosure: I don't own any Netflix stock, but this does look like a time to dip the toe. Maybe put on an option spread for insurance.
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How does that contradict anything I've said?
Because you said:
This story is not about people leaving. It's about them not getting as many NEW customers as they thought.
But the story says:
Gross additions were on target, but churn ticked up slightly and unexpectedly.
Your statement that they didn't get as many new customers as they predicted is incorrect; their gross addition of new customers was on track. What was not on track was their net number of customers, because, as the story says, churn (that is, the departure of existing customers) increased unexpectedly. The news is the unexpected churn.
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Ah yes... The famous "+5: Dead Wrong" comment moderation option. Haven't seen that one used in a white.
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Growth is growth. And Netflix has 1.54million more subscribers than it did a year ago.
Let's see, at $10/month, that means...um...carry the 1...trillions of dollars. Or something.
Don't worry about Netflix. Compared to the other video streaming services, they're bigger, more profitable and growing faster.
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I'm guessing they don't buy the store brand for their free soft drinks for employees because despite those "trillions of dollars" in subscriptions they made less than 250 millions in profit last year. That's more or less 2% of their revenue.
By comparison, here's an approx. profit/revenue for famous companies (recently):
-Alibaba: 68%
-Visa: 42%
-Google: 31%
-Apple: 25%
-Bank of America: 21%
-McDonalds: 19%
-Microsoft: 17%
-Facebook: 17%
-Verizon: 14%
-Berkshire Hathaway: 10%
-Ford: 7%
-Walmart: 3%
-Amazon: 1% (first yea
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That's a rate of growth, remember. Oh, and my mistake. That was a quarterly number.
I'm about ready to drop (Score:5, Interesting)
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The problem is that you can go through the content very quickly. Past month I've made it through: Peaky Blinders s3, Narcos, Marco Polo s1 & s2, and The Last Kingdom. I just canceled because there just isn't anything else I'm interested in. When those shows get new seasons I can just sign back up.
Re:I'm about ready to drop (Score:5, Insightful)
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Yeah... Netflix is not honest like those hard working cable channels who force feed us garbage and hours of commercials.
Jiggery-pokery (Score:3)
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.
ungrandfathering? (Score:5, Insightful)
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.
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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.
Call it what you will, but they are increasing people's rates and trying to tell them they didn't because it technically happened two years ago. When the charge on someone's bank statement goes up, they rightfully see it as an increase, and that is the bottom line here. I cancelled recently, mainly because I found myself going weeks at a time without using the service, but the increase sure didn't help them retain my business. This may not be a case of pissing on my head and telling me it's raining, but it
I wush I was a customer (Score:2)
Canned it last year (Score:3)
Better than $12.99/mo for YouTUBE RED! (Score:3)
People are bailing on Netflix due to content restriction and the killing of VPN. Still more economical than YouTube RED!
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People are bailing on Netflix due to content restriction and the killing of VPN. Still more economical than YouTube RED!
Netflix is probably also a lot better than a dog turd sandwich, but between those two things and YT Red, that's three things I have no inclination to pay money for.
(The comparison between dog turd sandwiches and Youtube Red is very debatable, of course, but that's not the point.)
The real, real, real reason... (Score:3)
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?
Dear Netflix, you don't understand (Score:3)
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.
Count me as one of those who cancelled (Score:3)
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.
So reassuring... (Score:2)
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 produ
2% (Score:3)
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.
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Retirement funds are buying most of the tech stocks. Some of them have the problem that they have another billion dollars every week that they have to invest in tech stocks and there just aren't that many good investments so they dump it into well know tech players. It is even worse in the UK where one type of high growth fund only allows investments into 200 companies that are registered in some government scheme. Some of their stock prices seems to have nothing to do with any type of value.
Re:$85.90 per share? Lol (Score:4, Interesting)
Know who else has that "problem"? Warren Buffett and Berkshire Hathaway. Something like $3 billion in cash arrives in Omaha every month for redeployment. But as a master capital allocator, Buffett is happy to sit on cash until something attractive crosses his desk, i.e., no overvalued "tech" companies.
Unfortunately, the macro pattern over the last few decades has been boom-bust as easy money leads to stupid, short-sighted exuberance for shares of mediocre businesses with owner-unfriendly management (hence the non-GAAP bullshit and stock-based compensation that's somehow not an expense).
The adults in the room endure the pain of sitting on cash -- QE and the central bankers certainly make it hard -- before the the bubble de jour implodes and the markets crash back to reality. But after the party is over, patience is rewarded with bargains for shares of businesses with real, enduring, high-quality profits. Think of it as time and personality arbitrage.
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You've answered your own question.
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