I canceled my subscription a week or so after they raised prices.
(Reuters) – Netflix Inc cut its third-quarter forecast by 1 million U.S. subscribers, sending its shares down nearly 19 percent, as the company known for rapid growth expects more fallout from a price increase on its DVD service.
On Thursday, Netflix said it would have 24 million subscribers at the end of the third quarter, down from a prior forecast of about 25 million given soon after the July announcement of the price increase.
The decision by Chief Executive Officer Reed Hastings to raise rates for customers who still want DVDs by mail took effect earlier this month.
Fewer customers than expected are opting to take Netflix’s DVD-only subscription package. Netflix now expects to have 2.2 million such subscribers, down from the previous forecast of 3 million. The company also cut its forecast for streaming-only subscribers, to 21.8 million from 22 million.
Lazard Capital analyst Barton Crockett expressed concern that the changes might also hurt Netflix’s fourth quarter.
“Clearly, if the third quarter is slipping, there’s risk to the fourth quarter, as the year-ago period was a time when everything went right for Netflix,” he said in a research note.
Crockett called the price increase a “rare, large and surprising misstep” by Hastings.
From Think Progress:
Gawker’s Seth Abramovitch has a piece revisiting the heartbreaking story of Kent Snyder, the brains behind Ron Paul’s innovative online strategy during the 2008 presidential campaign, in light of the congressman’s recent comments endorsing the position that people should have the “freedom” to suffer and die from lack of health insurance. During the CNN debate earlier this week, Wolf Blitzer asked Paul if he would let an uninsured man die in a coma or would he advocate some government role in saving his life. After saying that he would let the uninsured man suffer the consequences of not having health insurance, Paul hedged slightly and said churches and charity would take care of him most likely.
But as Abramovitch notes, Snyder, a volunteer strategist who eventually became a campaign manager for Paul’s presidential bid, fell ill of pneumonia during the campaign. Snyder did not have health insurance, like the hypothetical example given by CNN’s Wolf Blitzer, and stacked up $400,000 in medical bills. On June 26, 2008, exactly two weeks after Paul ended his bid for the presidency, Synder passed away due to complications from his pneumonia. Synder’s family could not pay the bills left by Snyder, so friends set up an online campaign to raise the money for Synder’s procedures.
They only raised around 35K.