Netflix Lowers Customer Forecast by 1 Million as Price Hike Kicks In
The streaming movie and DVD rental company released a statement this morning announcing it is lowering it’s estimate of DVD rental customers from 15 million to 14.2 million and streaming customers from 22 million to 21.8 million by quarter’s end.
Twitter reaction has been harsh, the majority of conversation has been people saying they predicted this or confirming they left the service.
The new Netflix pricing model took effect on Sept. 1, gives customers the choice of $7.99 per month to either stream movies over the Web or rent one DVD at a time via mail. The company’s former flagship offering of streaming + DVD rental now costs $15.98 per month, a 60 percent increase from the previous $9.99.
The new pricing isn’t just causing a drop in customer estimates, the 4 percent cut in its subscriber outlook knocked 16 percent off Netflix’s share price, sending the stock to its lowest levels in 2011.