Netfilx has lost its more than 800,000 customers in the recent quarter due to price hike. Company has finished third quarter with 23.79 millions US subscribers which was 24.59 million in the end of second quarter. In 3rd quarter Netflix had announced 60% price increase and they predicted that it would not affect the growth of the company. But subcribers did not like this and compnay has seen a loss in terms of subscribers.
In a letter to shareholders, Netflix acknowledged that it handled communication around the price increase poorly:
“$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. We compounded the problem with our lack of explanation about the rising cost of the expansion of streaming content, and steady DVD costs, so that … many perceived us as greedy. Finally, we announced and then retracted a separate brand for DVD. While this branding incident further dented our reputation, and caused a temporary cancellation surge, compared to our price change, its impact was relatively minor.”
