Netflix Stock Plunges After Rate Change
A recent dramatic Netflix rate hike has had an effect on the company’s stock, as prices plummet following the September 1st new pricing structure debut.
In July, the company announced it was splitting its subscriber plans, charging separately for DVD subscriptions and streaming only subscriptions. Previously, the plans were offered jointly, and for subscribers to both plans, rates increased as much as 60%.
Predictably, the announcement went over like a lead balloon with Netflix’s previously adoring fan base, even prompting a video by Seinfeld‘s Jason Alexander calling for relief to the first world’s Netflix subscribers. Across social media networks like Facebook and Twitter, Netflixians vowed to quit the service in protest of the rate hikes.
It would appear at least some made good on that promise, as stock prices for Netflix have dropped in the weeks following the rate increase’s implementation. According to CNN, Netflix has cut its outlook of subscriber numbers today:
Netflix on Thursday cut its subscriber forecast for the current quarter, saying it now expects to end the period with 24 million customers — down from the 25 million the company forecast just a few weeks ago… That’s also down from the 25.6 million global subscribers Netflix had on June 30, the end of its second quarter.
Complicating matters for Netflix is the fact that some of the service’s most popular content options- titles provided by Starz- will soon not be available due to a contract dispute between the cable channel and the streaming provider. While subscribers could see some new and better content to replace the Starz titles, the one-two punch of less choice and more cost has proven unpopular with Netflix subscribers.
