Netflix stock tanks after cutting subscriber outlook


Netflix CEO Reed Hastings demonstrates how various gaming devices can be used to stream content, during the launch of the Netflix streaming Internet subscription service for movies and television shows to TVs and computers. (MIKE CASSESE/REUTERS)

Online streaming site Netflix told investors Thursday that it has revised its projected subscriber numbers by almost 1 million following a controversial change to the company’s pricing plans.

In July, the company announced that it would change its pricing structure and no longer offer its popular joint streaming and DVD-rental plan, opting instead to split unlimited streaming and DVD rentals into two different tracks. The decision upset customers and has clearly had an impact on the service’s subscriber base.

On Thursday, the company told investors that it had revised its subscriber projections, but stood by its choice to split the plans.

“We know our decision to split our services has upset many of our subscribers, which we don’t take lightly, but we believe this split will help us make our services better for subscribers and shareholders for years to come,” wrote company CEO Reed Hastings and CFO David Wells.

The pricing changes may not be the only reason customers are leaving, however. The company also ended its partnership with the Starz media group, which will eliminate about 8 percent of the company’s streaming content.

Netflix stock took a heavy hit Thursday on the subscriber news, and was down nearly 19 percent at the closing bell.

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Netflix dilemma: higher prices, less content

Starz cuts ties with Netflix

Hayley Tsukayama covers consumer technology for The Washington Post.
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