It appears that the folks at Netflix underestimated the potential consumer blowback from its decision to split streaming and DVD delivery into two services, effectively increasing the price on customers by upward of 60%. While the company had originally estimated it wouldn’t see too huge of a defection this quarter, it has since changed its tune.
Netflix now expects to lose around one million customers this quarter, 80% of those being from people who had elected for DVD-only service. That’s more than one-in-four of its previously 3 million DVD-only customers.
Things are nowhere near as grim on the streaming-only side, where Netflix expects to lose 200,000 users, less than 1% of its overall streaming only customer base.
Netflix expects to lose 1 million subscribers in third quarter [Chicago Tribune]