Netflix Suddenly Losing A Lot of Subscribers

Burn it all.

They hiked their prices again -- to watch the same ten Korean gangster films you've already seen three times, plus all the great Parks & Rec you could want -- and people said, "Nah, brah."

While earnings-per-share came in at $0.60, four cents above expectations, and revenue was only $10 million short of expectations at $4.92 billion, the subscriber numbers were of grave concern.

Domestic paid subscribers actually fell by 126,000, while the expectation was for an increase of 352,000. That's a miss by almost half a million subscribers.

Yet Netflix management doesn't really have a good excuse for this decline, and is using some smoke and mirrors to downplay it.

On the one hand, management said there wasn't any material change to the competitive landscape. On the other, Netflix claims the number of subscribers added in the first quarter was so large that there may have been "more pull-forward effect" than it realized.

That may explain why there weren't any subscriber additions, but it doesn't explain the 126,000 subscribers that canceled the service. It's the first quarter-to-quarter decline in years.

And yet, management claimed that domestic subscriptions were "essentially flat." That's the smoke and mirrors.

Let me clear my tab-bar of this hanger-on:

posted by Ace of Spades at 05:55 PM

| Access Comments