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Netflix admits it will end up with fewer subscribers than predicted, shrinks DVD-only count
Back in July, after announcing it would decouple unlimited movie streaming from unlimited DVD rentals and charge more to keep both, Netflix predicted it would end up with 25 million subscribers at the end of Q3. This morning it advised investors that prediction has been slashed by 1 million, however most of that shortfall is predicted to come from fewer DVD-only customers than expected, which is expected to come up 800,000 short. While we'll still have to wait for the actual Q3 results to see how things pan out, the company still claims its projection of 12 million subscribers to both services is right on. While it backtracked on the total numbers, it also outlined its reasoning for raising prices by improving the DVD business, raising more cash to spend on streaming licensing and ultimately "remain price aggressive" and keep its individual offerings at $7.99 each. Much of the kicking and screaming online indicted Netflix's streaming library for failing to live up to the new price, anyone surprised many cutters seem to be coming from the DVD-only side?
Netflix rises to 25 million subscribers in Q2, thinks DVD business has already peaked
If you were still wondering why Netflix chose right now to split apart its unlimited DVD and streaming movie plans you need look no further than the just released Q2 financial report. According to the numbers, 75 percent of new subscribers were picking streaming only plans, while the total number of people on the hybrid DVD / streaming plan had actually decreased slightly, even as it breached 25 million subscribers worldwide. Of course, it did notice the intense backlash to the new rates, but predicts that after the hit of cancellations by the end of the third quarter it will still have 22 million people subscribed to streaming, 15 million total subscribed to DVDs, and about 12 million customers with both. Waiting on that Facebook integration? Don't hold your breath, while the new features are due to launch soon in Canada and Latin America, it claims ambiguous wording in the Video Privacy Protection Act is holding things back domestically. Other details include confirmation it will not look into purchasing Hulu, and that it's still negotiating a renewal of its deal with Starz. While the DVD business may have peaked, it's not quite dead yet and Netflix indicated it will start marketing that feature again in the fourth quarter. Click the source link to paw through the PDF yourself, we'll be keeping an ear tuned to the investor call later to find out exactly what the company's executives are thinking.
Netflix officially separates DVD, streaming pricing; $15.98 and up for both
Netflix hasn't hinted at any upcoming plans to change the services it offers, but NewTeeVee spotted an unadvertised DVD-only plan on its site, and an anonymous tipster indicates that's just the start. The DVD.Netflix.com page offers unlimited DVDs by mail, per month (one at a time) for $7.99, which slots it between the standard DVD & streaming combo plans and a $4.99 offering that gives just two DVDs per month. According to our source Netflix is planning to change its pricing entirely by implementing a streaming only plan with no discs for $7.99 and changing the minimum pricetag for combined services to $15.98 -- up from the current $9.99 it has charged since November. They indicated the change would take place tomorrow night around 9 p.m., with customers notified by email and no plans to grandfather any of the old pricing setups along. With aggressive expansion plans and its costs to acquire content rising sharply, hiking the price by 50 percent on many of its 20 million+ subscribers could be the easiest way to make the numbers add up. Now, subscribers are left to determine exactly what Watch Instantly streaming (or DVD access) is worth to them. Update: Just that fast, Netflix has officially announced these changes to its pricing plans. Just like our information indicated, DVD only or streaming only unlimited plans are available for $7.99 each per month, or $15.98 together. Existing members can float on their current plans until September 1st but new members will see these rates effective immediately. According to a post on the official blog, the change replaces the DVD plan's existence as a $2 surcharge over streaming and from now on it will no longer unlimited discs and streaming as a single package. Two discs at a time will cost $11.99 by themselves now, but there's no mention of higher plans just yet. Fans of the plastic platter should be at least a bit encouraged however, as there's a new team devoted solely to that service -- here's hoping they can get the stagnant Blu-ray catalog refreshed. [Thanks, Anonymous]
