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GeeEmm

An hour after market close, and Netflix is now hovering around the $85-86 range.

Perhaps it will rally a bit during the course of the week, but - yikes.

BoB

Put all your eggs in the streaming basket and then...

have that basket break every weekend with outages...

You get egg on your face!

NF forgot who brought them to the dance. DVD by mail made them. Streaming made them a great 1-stop shop for entertainment. They too quickly tried to spin off DVD rentals before streaming grew up and they are paying the price.

ONE DAY streaming WILL prevail, but not today. Content is minimum compared to DVDs, NF is at the whim of studios for content, etc.

NF needs to wait and build the NF empire until streaming IS strong enough to take over.

Too much too soon Reed. :(

Seth

Hastings has to go. This is like when David Neeleman at JetBlue tried to manage the disastrous snowstorm delays. Visionaries do not make good managers.

How far do the share prices have to drop until the tiny Netflix board takes action? This is becoming embarrassing.

Crow550

People got pissed and canceled.

They have a lot of work to do.

First thing would be to listen to Customer suggestions.

Mike

Let me know if I am missing something. Could someone explain to me why they want to move away from a $17.18 per customer PROFIT DVD business, to a $1.5 per customer PROFIT online streaming business? That kind of stands out to me when looking at the Q4 out look.

Scott of Detroit

I still don't get it. DVD's are way more profitable than streaming. If anything, they should be tying the two services together while continuing to build streaming.

Right now DVD's are their cash cow. They need to cherish and feed it, not abandon it.

It's amazing how a company can hurt itself so badly in just one quarter. Irreparable self-inflicted brand damage.

But on a positive note, minus the service interruptions (which have been rather minor, but annoying), Netflix has great technology. The streaming delivery system is rock solid. It only needs content.

They should have left streaming and DVD plans tied together until streaming had more titles, I think they pushed streaming out of the next a little early, but it is capable of standing on its own.

BigSaltyDookie

Oh man, how are the people running Netflix supposed to feed their kids with those kinds of losses?

Seth

The sad thing is that Hastings won't leave until they drag him out kicking and screaming. Michael Eisner, Mickey Drexler, Meg Whitman, David Neeleman... not one of the so-called star CEOs knew when it was time to go.

All of them claim they are only interested in the company's best interest and all stay far beyond their usefulness to the organization until the respective board is embarrassed into pushing them out.

Robert Emmerich

5 hours after the closing bell and nf is still down 27% to $85. They've lost the right to be capitalized.

"21.45 streaming customers and 13.93 million DVD customers (they're breaking out the two plans)"
Where's the really bad pie chart showing that most subscribers are either/or but in reality most are both? Where's the overlap number? They don't have 35 million customers. Their stock should be down just for this really lame attempt at obfuscating the numbers. Give 3 numbers - streaming, DVD, both. Stop pretending that everybody wants one or the other, or really stop pretending people only want streaming, many people want both, just admit it already. (OK I guess they kind of admitted it when Qwikster was aborted.)

Of course they haven't seen any impact from Amazon and BB, when the nf building is on fire people are simply running out into the streets to get away.

To end on a happier note, I still think they'll survive. (Though maybe bought out, but the nf brand will survive, it's still ubiquitous enough.) I'm sure there are many other companies that would love to have an $85 share price. Citibank is $31 after a 10 for 1 split.

Lamont

I don't see any mention of the number of subscribers who downgraded their plans either. What revenue loss from people dropping streaming, going to streaming only, dropping the number of discs out at a time, etc? This would be interesting to know.

Seth

"Mr. Hastings said he was not sure whether the plan to split the company had been presented to customer focus groups before it was made public. Mr. Hastings said he assumed it had been. But he said he did not recall what those focus groups had said about the plan." - New York Times, October 24, 2011

Is this a joke? Seriously is he claiming that he didn't know if one of the biggest decisions in the company's history had been focus grouped?

The ignorance defense... this is just getting sad... Surely people at his own company must know he is bullshitting...

rjm

Would the stock really be at $200 now if not for the price increase and the qwickster debacle ?

I think not.

Bubbles burst. Knowing exactly when is next to impossible.

NF is still a good value. And Hastings still has an impressive long term record of building shareholder value.

However, unless the stock rebounds, he is probably going to be forced out.

rjm

When I said netflix is still a good value, I meant from a customers standpoint.

I wouldnt buy the stock but I wouldnt at much lower prices either simply because there is too much risk and its not my style.

I invest. Many growth stocks are wild gambles that may or may not turn out well depending on when you buy & when you sell.

I still recall the moronic idiots back before the dot.com bubble burst. Their entire argument for buying virtually any tech stock was "the internet is going to keep growing".

My posts are as a customer.

For $7.99 or $15.98 or even $19.98-29.98, netflix provides a lot of value compared to other choices.

Now, if I worked 5-6 days a week and came home at non-peak hours, I might consider redbox a viable alternative. I work from home and special trips to the redbox make the $1 rental cost $2.50+ when you figure wear & tear & gas. (I live 2 miles from the closest redbox)

Is netflix perfect ? Of course not, but over 23 million of us subscribe.
Its clearly a better option than HBO or Showtime for those of us without cable.

And even if you have cable, its arguably a better value.

I dont know exactly how much they cost. My dad had them when I was a kid. When I moved out, I didnt get them. Later, I got an illegal descrmabler and got some of them via theft.

When I moved in my house, I tried to have the cable hooked up but they told me they had no record of my house.

Turns out, the cable was already illegally hooked up and 9 years later, Im still waiting for them to call me back & turn my cable on.

Now, my descrambler does not work though so I havent watched HBO or Showtime for over 9 years except via netflix.

Anyone know if my old descrmabler still has value ?

Jaibhole

Netflix claims high performance culture and fires employees for making minor mistakes..It will be a shame if Hastings is not fired for completely ruining the Netflix brand in just one quarter..

GeeEmm

$76.30 and falling, in pre-market activity.

Double yikes.

mcqfesijiba

They need a new innovation or to show some sort of improvement in service to justify the price increase. Their honeymoon is over. They can't coast anymore and their competition is improving. They haven't had as much working against them in recent year. Not to mention their decision making lately has been ... weird. I've stuck with them, but I will definitely admit, the price increase has had me looking at alternatives a lot more.

Scotty

It's time to give Hastings a generous severance package.

GeeEmm

From the AP article:

"The backlash will deprive Netflix Inc. of some of the revenue that management had been counting on to finance the company's expansion plans while it pays higher fees for Internet video streaming rights. The result: Netflix expects to post losses next year when it starts selling its streaming service in Britain and Ireland. The company didn't offer further specifics besides saying it won't go into any other overseas markets until it's making money again."

and

"It's the latest setback for a former stock market darling whose shares topped $300 just 3½ months ago. Netflix's market value had already plunged by about 60 percent, or nearly $9 billion, before Monday's late sell-off."

First of all, if NF didn't have the capital to invest in international markets, then it should have waited. Raising the prices a little, to account for increased operating costs (acquiring content, site and technology upgrades, etc.) is understandable, even to be expected, periodically. Remember, there had already been a minor subscription increase in November 2010, prior to the hefty one that was announced in July 2011 and delivered in September. However, raising member fees to cover expansion costs up front is not in the same category. It turns consumers of the service into forced, but voiceless, investors. It was a very bad move. You don't expand unless you can already afford to, or you raise capital through proper investment channels - not by riding on the backs of your consumers.

Second, the proof that the 60% price hike - coming on the heels of the previous, perfectly reasonable increase - was an ill-conceived, irrational move is evident in the +60% loss in Netflix's market value since then.

It is often said that what goes around comes around - and in this case, it clearly did.

Brandon

He didn't post it in his comment this time, but I know the author is not a NF stock shareholder, I think to maintain impartiality. I bet he is feeling good about that decision today.

Goofy Goober

Wow, 35% drop in the stock price so far today. Netflix is now a potential business case study for what *not* to do.

Jv3030

Streaming will not cut it!! I have gone to blockbuster online love it!

moviegeek

After all the bonehead decisions this year Reed Hastings needs to go.

Shaun

Netflix may not be seeing an impact from Blockbuster/Dish yet, but they will. I am not switching until the end of this week, when streaming / downloading to my DVR becomes available. But I will definitely be switching then.

Missouri

Reed needs to go - he is incredibly out of touch with the customer base that got him this far.

Netflix deserves everything they get.

Chet

Am I reading the forecast right?

After losing 800,000 customers this past quarter...

they expect no growth in streaming, and possibly a loss of another 2+ million customers...

and they expect to lose another 2.6 to 3.6 million highly profitable DVD customers?

"Sorry about losing 800,000 customers; we should have communicated that better. But we're excited to announce that we expect to lose millions more soon!"

gir

Hard to tell - total subscribers, USA subscribers, streaming subscribers, DVD subscribers, DVD-only subscribers, streaming-only subscribers - it's hard to know when you're comparing apples to apples. Companies always seem to like to play numbers games. I often think they are intentional trying to obfuscate things.

That said, I can't see how we can interpret the DVD numbers any other way, dropping from 13.93 million to fewer than 11.3 million. DVD subscription is USA only, and those numbers are too large for either one to be DVD-only, not unless they're expecting colossal DVD-only subscriber growth.

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