Netflix price increase creates backlash, stock drops

Yesterday we gave you good news that streaming service Netflix would be opening their doors to the UK and Ireland in early 2012, but unfortunately with the good, comes the bad news. Despite Netflix opting to give its customers a low subscription cost once launched, it hasn’t stopped the company in the meantime, experiencing a drop in paid subscribers within its third quarter.

Reporting for Mashable, Todd Wasserman has spoken about how the price increase in September deterred some 805,000 paying customers, causing them to jump ship! It was noted that within the third quarter, in fact some 23.79 million US subscribers were reported compared to some 24.59 million during the quarter before. Consequently, investors have hit back by as reported “sending down” 27% in after-hours trading.

The streaming service have admitted that the price increase and the way in which it was openly communicated, could have been dealt with differently. Part of a statement from the company said, “$7.99 for unlimited streaming and $7.99 for unlimited DVD are both very aggressive low prices, relative to competition and to the value of the services, and they are the right place for Netflix to be in the long term. What we misjudged was how quickly to move there.”

As Associated Press reported, Netflix has lost more than a staggering quarter of its value, if this continues and a sharp decline is noted today in its trading, this will make it the first time that Netflix’s stock price has fallen below $100 in some 14 months.

Are you a fan of Netflix or were you deterred by the price increase?

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