Business owners take note of Netflix management decisions

Posted By on October 24, 2011

The loss of subscribers was not a surprise to those angry withnetflixafterhours111024 the boneheaded decisions from Netflix management (2) … but I think even those who “modified” their plans are surprised at the shear numbers who left in the 3rd quarter – 810,000 subscribers! Ouch … a painful loss after hours Monday for those stock owners who continued to hold shares.

Netflix Inc. said it lost roughly 810,000 subscribers in its third-quarter and forecast fourth-quarter earnings below expectations following an exodus of users unhappy with a subscription pricing change in the summer.

The movie-rental company also projected that it will begin losing money for a few quarters starting in the first period, due to costs associated with an expansion in the United Kingdom and Ireland.

Netflix said it ended the quarter with nearly 23.8 million U.S. subscribers, falling short of its own expectations of 24 million. The poor results spooked investors and led to a sell-off that chopped more than 27% off the share price, to $86.30 in after-hours trades.

Continue at WSJ

Comments

  • http://pulse.yahoo.com/_MBIQ4I3RKM4O5TIKEMPJGUDRNM Jacob

    I’m one of the .0001% who dropped them.u00a0 I just wanted to say I was a % of something. :)

  • http://richc.myarchive.us RichC

    No … you’re one of the 4.5% that drop them! (that’s a pretty significant number of paying customers to lose in one-quarter) I’m starting to think that the stock has been a bit oversold though and might just pick up a few shares around $80. Netflix has an infrastructure and seems to have figured out how to deliver over theu00a0 Internet pretty well … they still have a future IF they get their PR back on track. Thanks for comment Jacob.

  • http://profiles.google.com/huntertj timhunter

    watch not only for their PR but for the deals being made with studios.u00a0 http://online.wsj.com/article/SB10001424052970204422404576594614141397144.htmlnnThere are competitors now with Netflix that didn’t exist a few short years ago

  • http://richc.myarchive.us RichC

    Good point about the competition … and I suspect Apple is really going to try and shake the entire “streaming” content thing up at some point? No doubt Netflix knows that it needs to shed the DVD mail business to stay with the grow area of streaming. With that, they do still haveu00a0 a solid lead since their brand is already on every brand of hardware (not true for Apple now or most likely in the future) and in negotiating content deals as your link mentioned. At some point Netflix to be low enough for some cash rich company to acquire. One big thing they have going for them is their product does work most of the time … yet to be seen for other high volume Internet streaming “networks.” (I mention the “networks” because ofu00a0 the problems Glenn Beck’s GBTV is having … tough business creating content AND building out a network.)

Desultory - des-uhl-tawr-ee, -tohr-ee

  1. lacking in consistency, constancy, or visible order, disconnected; fitful: desultory conversation.
  2. digressing from or unconnected with the main subject; random: a desultory remark.