Is Netflix’s Projected Subscriber Loss Premature? - High-Def Digest Forums
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Old 08-30-2011, 03:44 AM
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Is Netflix’s Projected Subscriber Loss Premature?

29 Aug, 2011
By: Erik Gruenwedel




New poll data suggests 60% price increase for combined streaming and disc rentals starting Sept. 1 may not result in expected mass subscriber exodus


With Netflix’s rate increase set to begin this week, indications are the projected departure of millions of subscribers might not materialize, according to a new poll.

Indeed, the number of subscribers leaving the service could hover around 10% from an ongoing poll with more than 4,000 respondents commissioned by HackingNetflix.com.

Media reports and some analysts contend about 2 million subs will terminate service. By comparison, Netflix lost 3.5 million subs during its most recent quarter via normal operations -- a figure offset by 5.3 million subscriber additions.


Nearly 42% said they would opt for the $7.99 streaming-only plan, while 33% said they would stick with the hybrid $15.98 streaming and disc service. Another 11.5% said they would only rent discs (starting at $7.99) while nearly 3.5% said they would put the service on hold.

When Netflix first announced the rate increase in July, a similar poll with more than 11,000 respondents found that more than 33% said they would quit the Los Gatos, Calif.-based service.

More than 32% said they would choose the streaming-only plan, while nearly 20% said they would choose the more expensive hybrid model. More than 4% said they would seek an alternative rental service.

With many subscribers’ monthly plans billing in late August, the actual rate increase wouldn’t appear on their statements until late September — resulting in delayed action (including termination) on their accounts.

“I’m procrastinating until I see my September bill,” wrote Aka Darrell — a sentiment shared by numerous others in the comment section related to the poll.


Netflix sub Lars Barlow wondered if anxiety toward the rate hike amounted to more perception than reality.

“I think it's strange how I am too cheap to pay [for] anything more than just 1 disk and streaming,” Barlow wrote. “The price increase doesn't bother me even a little. But for some reason adding Blu-ray for $2 [a month] seems like too much. It's like buying a smartphone. I'll spend $200 on a smartphone, but you better not charge me [99 cents for] an app!”

Michael Pachter, analyst with Wedbush Securities in Los Angeles, said the drop in subs would be mitigated by the lack of rental alternatives offering similar price points in digital and physical distribution.

Pachter believes the number of Netflix subs downgrading their plans to less expensive options will be greater than projected.

“[Netflix seems] to think that around 30% of subscribers will trade down; I think that number is closer to 50%,” Pachter said.

http://www.homemediamagazine.com/net...remature-24911
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Old 08-30-2011, 09:39 AM
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I expect lots of people to cancel. Netflix did a shitty thing.
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Old 08-30-2011, 09:42 AM
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I tend to agree with the article. People talk big, but at the end of the day Netflix offers tons of value, and what else is there really? B&M stores are closing their doors left and right.
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Old 08-30-2011, 09:46 AM
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Originally Posted by GizmoDVD View Post
I expect lots of people to cancel. Netflix did a shitty thing.
I think that many people certainly will but it may not be as bad as originally predicted.

I personally hope that it will not have that much impact on Netflix in the long term and I think the move they made to separate out the two services made sense from a business sense and would eventually be accepted for the value that it is even with the increases from most subscribers.

If you are an active disc user the extra cost is still value, if you are an infrequent disc user the cancellation of that service is no big deal.

In this case, the tone of the article from HMM is such that it seems that they observe that the amount of cancellations earlier projected may have been overstated and that its seems to be pretty favorable to Netflix in its scope.
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Old 08-30-2011, 11:01 AM
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OMG! Almost 8 hours into this thread and not a peep from PSound. Must be in held up in a long staff meeting in Los Gatos or something. :shh2:
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Old 08-30-2011, 11:34 AM
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I was okay with the price increase. Lots of people right now though may not be able to afford the increase but I have a few friends who only use HULU and Netflix exclusively. There's more than enough to watch between the both of those and limited to no commercials (Netflix at least).

I only have Netflix and my backlog of DVDs and BDs to watch so not really interested in cable right now. OTA suits me fine for now.
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Old 08-30-2011, 11:34 AM
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“I think it's strange how I am too cheap to pay [for] anything more than just 1 disk and streaming,” Barlow wrote. “The price increase doesn't bother me even a little. But for some reason adding Blu-ray for $2 [a month] seems like too much. It's like buying a smartphone. I'll spend $200 on a smartphone, but you better not charge me [99 cents for] an app!”
Loved this part that was not highlighted for obvious reasons. It shows the mentality of consumers out there and the lack of interest to pay for HDM.
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Old 08-30-2011, 11:44 AM
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Loved this part that was not highlighted for obvious reasons. It shows the mentality of consumers out there and the lack of interest to pay for HDM.
He must be older because Apps are the best part about a smartphone (Android and iOS).
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Old 08-30-2011, 11:47 AM
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I feel more people will cancel discs over streaming (if they chosose to do only one). Less people on disc plan might = less "catalog" (which already sucks for Blu-ray). In-laws already dropped discs.
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Old 08-30-2011, 11:48 AM
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Originally Posted by jiggawhat View Post
He must be older because Apps are the best part about a smartphone (Android and iOS).
Who buys a smartphone and not buy a few Apps?
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