Thursday, July 7, 2022


September 15, 2011 by · Leave a Comment 

In the wake of its decision to end its most popular subscription rate of $9.99 per month to rent movies or TV shows by mail or via online streaming and replace it with a $7.99 per month rate for either service, Netflix has wound up with 2.2 million DVD-only subscribers, 9.8 million streaming-only subscribers and 12 million with both DVD and streaming subscriptions — a total of 24 million subscribers. That’s down from 25 million who were receiving the combined service previously — but its monthly gross revenue has risen to about $288 million per month from about $250 million. Its net may even be relatively greater if it no longer has to incur shipping costs for those 9.8 million streaming-only subscribers who likely had previously also ordered DVDs. Nevertheless, Netflix said that the loss of a million subscribers was more than it had expected, but issued a statement saying that it plans to use its additional revenue to acquire licenses for more streaming video. “We know our decision to split our services has upset many of our subscribers, which we don’t take lightly, but we believe this split will help us make our services better for subscribers and shareholders for years to come,” it said. But in an interview with the Wall Street Journal, Janney Capital Markets analyst Tony Wible said, “Netflix has been a momentum story — you need more subs[cribers] to buy more content, which allows you to get more subs. Now you’re starting that momentum in the other direction, where you have fewer subs, which could lead to lower content, to fewer subs.” At midday trading on the NASDAQ, Netflix shares were down a whopping16.52 percent to $174.23.