It also would have eroded a competitive advantage. (Netflix doesn't break out those statistics in its earnings releases). Shares of Netflix ( NFLX) rose by as much as 10% following the news, before turning negative in the afternoon.įor investors, the problem with spinning off the DVD-by-mail service is that it accounts for between one-third and one-half of the company's overall sales, depending on which analyst you ask. "While this move doesn't solve the company's long-term issues, in the interim, at least it can try to accelerate some positive catalysts for customers and its stock price."Ġ:00 / 2:54 Netflix CEO: Losing Starz not a big deal "Basically, these guys are desperate, and this confirms it," said Tony Wible, analyst at Janney Capital Markets. The company had already lost an estimated 1 million customers, or about 4% of its subscribers, after Netflix split its DVD and streaming businesses in July, effectively raising prices on subscribers of both by 60%.Īnalysts said the company's second 180-degree turn indicates that even more customers were saying, "So long, farewell, auf Wiedersehen, adieu" to the business. "There is a difference between moving quickly - which Netflix has done very well for years - and moving too fast, which is what we did in this case." "Consumers value the simplicity Netflix has always offered and we respect that," Netflix co-founder and CEO Reed Hastings said. ![]() Netflix issued its second mea culpa in as many months, acknowledging the consumer outrage about its Qwikster announcement. members will continue to use one website, one account and one password for their movie and TV watching enjoyment under the Netflix brand," the company said in a statement. 18 that the company's movies-by-mail service would be rebranded as Qwikster and would add video games to its catalog, while the Netflix brand would be dedicated to streaming video.
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