Netflix Blames Press, Not Hikes, For Lower Subscribers

[HardOCP News]

As crazy as this sounds, maybe all this recent talk about price hikes, even though prices were actually raised last year, might have actually scared people off. Or, it really was the price hikes. Either way, Netflix added far fewer subscribers than expected.

"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," the company tells investors in the note. "Over the second half of this year, we’ll complete ungrandfathering. Our threetier pricing (in the US: $7.99 SD, $9.99 HD, and $11.99 UHD) is working well for us and for new members, and our gross additions remain healthy."

 

[NeoNemesis]

I'd honestly be fine with a $1-2 price hike at this point. The content they've been releasing lately has been stellar.

Shameless plug: If you haven't watched 'Stranger Things' DO IT NOW! It's ET meets Goonies meets Stephen King and it's pure awesome.

 

[Dunnlang]

Their original content has been good, but they are failing as a movie TV show streaming service. It seems every search for something I want ends in me paying to rent/buy it from Amazon instead.

 

[somecallmeTim]

It wasn't a "price hike" it was a slight increase. When the term Price Hike is used in headlines, articles, and everywhere, people are going to freak out. I am paying $2 more a month than I was (my increase hit this month). Two. Dollars. That's it. Same people that bitch about Netflix HD Streaming costing $12 a month are the same people that are paying $100+ a month for cable TV.

 

[cyclone3d]

Their original content has been good, but they are failing as a movie TV show streaming service. It seems every search for something I want ends in me paying to rent/buy it from Amazon instead.

Right now they have plenty of stuff I plan on watching.. for horror/action/sci-fi stuff they are pretty good.

There are also some free services such as Crackle that has some stuff that Netflix doesn't have.

 

[Dekar12]

Been paying the same price for a long time with Netflix, the few dollars a month is not that big of a deal. Their "original" content has been pretty decent lately and I still find stuff to watch and it is a hell of a lot cheaper then my cable tv bill ever was. The 2-3 streaming sites I belong to is still far cheaper then cable ever was. lol

 

[Deleted member 184142]

I would be willing to fork over $10 more a month for more content. They have lots of stuff to watch and the Netflix originals are quite good, I have no problem with paying for it.

 

[alxlwson]

So long as they keep killing it with Marvel content, I'm good. In addition, their other original stuff is fantastix, like Orange Is The New Black, House Of Cards(fucking amazing show), and others. Plus, it's my only source of tv when I'm out of the country for work.

 

[virtualheretic]

I doubt the slight price increase really scared anybody away, its still cheaper than any cable offerings by orders of magnitude.
Im guessing they didnt grow as much as expected due to market saturation.
Lets face it, if you want Netflix chances are you probably already have it less you havent cut the cord yet.

 

[Dead Parrot]

Econ 101: Higher prices tends to lower demand. Competition tends to split the market, meaning fewer customers per supplier.
Advanced Econ: It is the job of Quarterly Reports to deflect attention away from things that a company has done that adversely impact expected quarterly earnings. Common things are blame the weather, blame government or in this case, blame the media.

Adding 1.7 million subscribers in three months is VERY good compared to the average cable company, just not as good as the talking heads for investing media were expecting.

 

[Uvaman2]

Still a bargain, lots of content, no problems not cancelling.
I too have noticed what dunnlang mentioned... TV stations getting greedy, and having more/easy access to make their content available online.
I mean its not entirely unexpected, why hassle with netflix for bulk content when they can hand it over to amazon, and amazon writes them checks based on sales...
all in all not unexpected I guess.
Amazon service and speed more often than not beat GOOGLE movies (in my experience)... amazon server farms must be some scary industrial monsters I would say.

 

[nutzo]

Less content, higher prices, what could go wrong?

 

[Deleted member 93354]

Quite frankly the number of movies netflix takes from the movie theaters and puts on it's service is WAY DOWN. The replaced most of them with netflix originals and kids programming.

I mean seriously, when is the last time you saw any recent Pixar/Disney movies? I would love to see "ex Machina" And it's nowhere to be found on netflix. But Amazon has it.

 

[ruffbytes]

Netflix will eventually reach market saturation. This is the thing about business that business investors don't seem to understand. No business has limitless growth.

 

[dergreg]

It would be nice to see some more relevant and current titles. Aside from the Netflix-produced content it feels more and more like Hulu minus current TV.

 

[Deleted member 93354]

I would be willing to fork over $10 more a month for more content. They have lots of stuff to watch and the Netflix originals are quite good, I have no problem with paying for it.

Broadband: $60/month
Netflix: $10/month for 2 connections
Amazon: $10/month (roughly based on prime)
Hulu: $10/month

$90/month...you are up to a decent cable tv subscription. And you want to add $10 more?

 

[Dan_D]

Their original content has been good, but they are failing as a movie TV show streaming service. It seems every search for something I want ends in me paying to rent/buy it from Amazon instead.

This. I find other services to offer superior selection for current movies and TV shows. Unless Netflix addresses this, I think they'll lose more and more subscribers as time progresses. You are also spot on in that Netflix's original content has been great. However if I were to choose a single contect provider to pay for, I'm not sure Netflix would get my money based on those alone. All the shows I currently watch are available on Amazon or Hulu.

 

[Deleted member 184142]

Broadband: $60/month
Netflix: $10/month for 2 connections
Amazon: $10/month (roughly based on prime)
Hulu: $10/month

$90/month...you are up to a decent cable tv subscription. And you want to add $10 more?

I would have broadband even if I had cable TV, so that does not count, I have prime and have almost never used their video service, I don't have Hulu anymore, but the whole point is getting more content, meaning you would shift that 10-20 from Hulu and Amazon to Netflix and get it all in one place, and $20-25 a month for unlimited, commercial free, any time I want content, I am more than willing to pay for.

 

[Iching]

There's nothing on Netflix that I haven't watched. Movies/shows just vanish after few months. Cancelled this year and happy. Don't give them any money - oh, wait, it's only 10 dollars, right?

 

[bds1904]

Netflix is well on their way to being a cable MSO similar to a CLEC. If net neutrality didn't happen (and I'm glad it did) then Netflix would already be paying multiple companies, the bandwidth providers, to deliver content to customers on a monthly or yearly basis. That is a classic CLEC approach to content delivery.

The day we see all content delivered on demand will be the day that Netflix will have current shows. There is no doubt in my mind that the cable system is slowly changing to a "this show is available to watch at 8PM" as apposed to a "this show comes on at 8PM" model. An on demand model is unavoidable because of "advertising vs DVR". On demand gives both content providers and content creators control over how the show is actually watched which will allow them to directly target custom advertising. The data gathering system for targeted advertising is already in place at a few ISP's and has been in their TOS for years.

To talk about the "price increase", it is clearly meant to support two things. Development of original content and expanding their content delivery network. Although the "Netflix vs ISP" battle has fallen out of the news, I assure you that it is still going on. From Netflix's standpoint it's significantly better to own up to the last mile because it gives them direct control over the interconnection points. It also allows ISP's to reduce their cost of interconnection because Netflix brings the fiber to them in Netflix's name. It's a round-about way of ISP's charging an interconnection fee and prioritizing Netflix's bandwidth. It isn't considered unfair traffic weighting by the FCC if Netflix is announcing their networks directly on the ISP's backbone.

The "own up to the last mile" is also a classic CLEC model.

 

[Deleted member 184142]

There's nothing on Netflix that I haven't watched. Movies/shows just vanish after few months. Cancelled this year and happy. Don't give them any money - oh, wait, it's only 10 dollars, right?

There is a list of shows coming and going, they have lots of stuff on rotation, comes in for a few months and gone, but wait a little while and it will be back. If you have watched everything you care for, don't keep it, or try another service, thats the great thing about it. I will admit the stuff I really care about now are the Netflix shows, I still watch other stuff from time to time, but there are a number of good Netflix shows that eat up almost all of my show/movie watching time.

 

[dark_reign]

I noticed that they stagger new seasons of their original content throughout the year to keep people paying every month. Licensed content comes and goes, so it doesn't hold as much value. With the price increase, it makes more sense to binge watch for a month or two, unsub and then resub in a year.

 

[Dekar12]

Broadband: $60/month
Netflix: $10/month for 2 connections
Amazon: $10/month (roughly based on prime)
Hulu: $10/month

$90/month...you are up to a decent cable tv subscription. And you want to add $10 more?

In almost all scenarios people are going to be paying for broadband already. So, that is mostly a moot point, unless you have folks that are changing their level of service, since they are streaming more. Then the additional cost could be calculated in.

 

[admiralperpetual]

In almost all scenarios people are going to be paying for broadband already. So, that is mostly a moot point, unless you have folks that are changing their level of service, since they are streaming more. Then the additional cost could be calculated in.

I only pay $60/month CDN for my broadband and TV! no amazon or hulu...

anyway, I'd say Netflix going after all the VPN's is a big issue.. a lot of people only want to watch american netflix

 

[Raekwon]

I held off going from $8 to $12 to stream on 4 screens. I live with my wife and we don't need it. When they brought me to $10 and my relative got a 4K TV, I instantly moved to the $12 tier to try the 4K content. I consider Netflix in general to still be a very good price and I rarely even watch TV.

 

[Grahamkracka]

Broadband: $60/month
Netflix: $10/month for 2 connections
Amazon: $10/month (roughly based on prime)
Hulu: $10/month

$90/month...you are up to a decent cable tv subscription. And you want to add $10 more?

The vast majority of people with cable also have a broadband subscription. Your point is stupid.

 

[MacLeod]

Netflix is money well spent IMO. I cut the cord 3 years ago and went with Netflix streaming and it's been great. Yeah movie selection is kinda weak but there getting a lot better and they've got plenty of TV shows to watch. Plus Daredevil alone is worth $10/month!

Amazon Prime is kinda worthless. 95% of the time Amazon has nothing that Netflix doesn't also have. I'll likely be canceling my subscription after this year.

 

[Deleted member 184142]

Netflix is money well spent IMO. I cut the cord 3 years ago and went with Netflix streaming and it's been great. Yeah movie selection is kinda weak but there getting a lot better and they've got plenty of TV shows to watch. Plus Daredevil alone is worth $10/month!

Amazon Prime is kinda worthless. 95% of the time Amazon has nothing that Netflix doesn't also have. I'll likely be canceling my subscription after this year.

They have TV shows and movies Netflix doesn't have, but if they are what you want, that is another thing, however I almost never use Prime for it, I have Prime for shipping reasons. But adding more movies and TV shows is worth $10 extra to me, if we are talking a massive increase I would pay $30 a month for it, vs $100 for cable TV and dealing with ads and air times etc. Hell, I will pay $100 a month for on demand streaming long before I do cable again, on demand has spoiled me. No more waiting for a show or movie, or remembering to record it or trying to look far enough ahead to see whats coming on etc etc.

 

[nightfly]

Their original content has been good, but they are failing as a movie TV show streaming service. It seems every search for something I want ends in me paying to rent/buy it from Amazon instead.

Lots of stuff that I only watched part of (tv series, for example) are gone when I go back to see the rest. That's annoying. They should put an expiration note on stuff when you browse for it so you know how long you have to see it.

Netflix will eventually reach market saturation. This is the thing about business that business investors don't seem to understand. No business has limitless growth.

Which is why they screw themselves. In attempting to get different content to attract new customers, they remove the stuff that got them their current customers in the process. They we leave and they wonder why.

Broadband: $60/month Netflix: $10/month for 2 connections Amazon: $10/month (roughly based on prime) Hulu: $10/month $90/month...you are up to a decent cable tv subscription.

Yeah, but at least you got to choose what you were paying for. comcast and verizon just lump a whole lot of crap to sell as a package: I wanted fox sports2 to watch some auto racing that they wouldn't put on fox sports 1. Of course you have to take the other 30 crap channels that go with it. Then of course, Fox doesn't want you recording it and watching it later, so when it's time to watch, they change the lineup without telling anyone. And instead of the 24 hrs of Lemans, I got 18 hours of golf. Cancelled the extra package for that reason alone, they did it last year too. It's a 24 hour race, just leave it on one channel. Nope, they change it every few hours to another one.

400 channels, I watch about a dozen. There are so many horrible channels out there; most are sh!t fake reality shows. They should make a special package of those for the idiot shut ins that watch them.

 

[ManofGod]

*Shrug* It is the only streaming service I have and I have no TV service of any kind. I do have an over the air tuner that connects to my XBox One's hdmi in port and works great for the NFL Season.

 

[Deleted member 184142]

Lots of stuff that I only watched part of (tv series, for example) are gone when I go back to see the rest. That's annoying. They should put an expiration note on stuff when you browse for it so you know how long you have to see it.


Which is why they screw themselves. In attempting to get different content to attract new customers, they remove the stuff that got them their current customers in the process. They we leave and they wonder why.

Most are on rotation and will be back, this allows more content without price going up which many people didn't want, so the people got the model they voted for. Also, if you have something on your watch list or started something you will get a notification saying "this item on your watch list will be removed on this date", however the content will also be back in most cases after a few months, the stuff that is removed forever is not Netflix, but who ever they are licensing it from. Just like the new Star Trek TV show, it will be on Netflix....But not in America, they will not allow them to have it, so you have to buy CBS all access in the states to be able to watch the show.

So really you should be mad at the content owner for stupid rules and region locked content, this is one of the main reasons Netflix no longer allows VPN access, as people were using them so they could access content from other regions, but the content owners threw a fit about it. Believe me, there is even more content on Netflix, however the content owners will not let you watch it because you live in America, or the EU or whatever region they tell Netflix they don't want streaming access to.

 

[Deleted member 93354]

The vast majority of people with cable also have a broadband subscription. Your point is stupid.

Yes but video is about 90% of your broadband consumption no? So you could make a justification that 90% of your $60 bill is for video.

 

[Ski]

I'd honestly be fine with a $1-2 price hike at this point. The content they've been releasing lately has been stellar.

Shameless plug: If you haven't watched 'Stranger Things' DO IT NOW! It's ET meets Goonies meets Stephen King and it's pure awesome.

You must have grown up in the 80's just like me because that's exactly how I felt watching that show. It's refreshing to see original content that reflects the nostalgia of that era.

 

[defaultluser]

Broadband: $60/month
Netflix: $10/month for 2 connections
Amazon: $10/month (roughly based on prime)
Hulu: $10/month

$90/month...you are up to a decent cable tv subscription. And you want to add $10 more?

And you get the Internet with your cable service as well. OR were you planning on living back in the 1980s with your cable sub?

I was paying $100 over the cost of internet alone for expanded HD cable plus Showtime plus Starz plus DVR.

I can get more content than I'll ever watch now for $30/month (Hulu, Netflix, Showtime) . I get all the local channels for my NFL fix.

The Amazon Prime is a free benefit because I was paying for Prime before the streaming movies/music was added. I would still keep keep paying if they dropped the price back to $80 and made the streaming service separate. But I feel that 20 bucks a year premium for Prime streaming is more than worth it.

So, I used to pay $1200/year for my video entertainment. Now I pay $380/year.

 

[Macblastr]

As crazy as this sounds, maybe all this recent talk about price hikes, even though prices were actually raised last year, might have actually scared people off. Or, it really was the price hikes. Either way, Netflix added far fewer subscribers than expected.

"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," the company tells investors in the note. "Over the second half of this year, we’ll complete ungrandfathering. Our threetier pricing (in the US: $7.99 SD, $9.99 HD, and $11.99 UHD) is working well for us and for new members, and our gross additions remain healthy."

Surprising to see so many comments that like netflix... in my humble opinion, netflix is facing more and more competition, so its no surprise to me that competitors are gaining ground and taking their customers away. Speaking for myself - i paid for prime last year just for the music and shipping... the movies and tv shows were an added bonus... so much so, that when netflix announced they were raising prices - i cancelled my subscription. I would love to see the data on how many subs were lost in the 90 days following the rate hike.

 

[Stiler]

They need to have clear notices on when stuff is leaving, nothing more infuriating then being in the middle of a good show and then coming back to watch the next episode and it's just gone...with no warning.

Also they need to get more good newer content. Seems like Amazon gets better newer movies and hulu gets better newer shows. NEtflix seems more and more about getting low tier c movies/shows and focusing more on original programming, and while it is good (Loved Stranger Things) it's annoying to not be able to find a good movie to watch at night when there's nothing else to watch.

 

[Ur_Mom]

It wasn't a "price hike" it was a slight increase. When the term Price Hike is used in headlines, articles, and everywhere, people are going to freak out. I am paying $2 more a month than I was (my increase hit this month). Two. Dollars. That's it. Same people that bitch about Netflix HD Streaming costing $12 a month are the same people that are paying $100+ a month for cable TV.

I grumble, bitch and moan. But, I pay it and I still feel I'm getting a good value from it. No one likes to pay more, even $2 a month. That's a taco a month. I just don't see it as a breaking point.

 

[Ur_Mom]

Broadband: $60/month
Netflix: $10/month for 2 connections
Amazon: $10/month (roughly based on prime)
Hulu: $10/month

$90/month...you are up to a decent cable tv subscription. And you want to add $10 more?

Yes.

Broadband - I have that regardless of any other services.
Amazon - I get it for Prime, the other stuff is just an added bonus. I make that back easily with shipping costs and time.
Netflix/Hulu - No contract, so if you don't want it for a month or 6, drop it. If you don't want Hulu during the off seasons, drop it.

Some people want to penny pinch everything, though. For some, that extra $10 is fine. For others, it's a half rack of beer a month (or 5 tacos.... ). It's all relative to your situation. You're not wrong. You're just saying you're not happy with it.

 

[lcpiper]

It wasn't a "price hike" it was a slight increase. When the term Price Hike is used in headlines, articles, and everywhere, people are going to freak out. I am paying $2 more a month than I was (my increase hit this month). Two. Dollars. That's it. Same people that bitch about Netflix HD Streaming costing $12 a month are the same people that are paying $100+ a month for cable TV.

$2 on a $9 service fee is a significant percentage increase. Something like 18% isn't it?

Anyway, I left Netflix a couple months ago and moved to Amazon Prime. It had nothing really to do with the price or an upcoming increase, their programing was stale. I got tired of looking at the same programing over and again. So I am over on Amazon Prime now. Simple.

 

[lcpiper]

Yes.

Broadband - I have that regardless of any other services.
Amazon - I get it for Prime, the other stuff is just an added bonus. I make that back easily with shipping costs and time.
Netflix/Hulu - No contract, so if you don't want it for a month or 6, drop it. If you don't want Hulu during the off seasons, drop it.

Some people want to penny pinch everything, though. For some, that extra $10 is fine. For others, it's a half rack of beer a month (or 5 tacos.... ). It's all relative to your situation. You're not wrong. You're just saying you're not happy with it.

Like I just said myself, I'm becoming a streaming service vagabond, a nomad of the internets. So yes, I agree with Ur_Mom that because of the less then permanent arrangements with no-contract service agreements, people can afford to look at things differently. You aren't locked in for a year or two. And yes, the broadband connection is just the enabler that I would have even if I went back to DirectTV so I don't think of that cost as part of the TV deal. It's more of a cost that enables all kinds of other deals.