Netflix Lowers Price, Stock Plummets
I’m sure Netflix now knows the answer to the classic phrase: What a difference a dollar makes! Easy, 12% of your stock price and a 52 week low.
With Netflix lowering the price of its two of its most popular subscription plans by $1 (The $9.99 to $8.99 and $17.99 to $16.99) investors reacted quickly today by hammering the stock with a massive sell off.
“The Netflix story is all about subscriber growth,” says Pachter. “The wording of this, the timing and the actual act of cutting price suggests they lost subs in the second quarter, which means people are going to realize that they aren’t going to grow anymore.”
Netflix had 6.8 million subscribers as of the end of March, and it said in its news release on Sunday that its new pricing will benefit its “more than six million members.” Pachter says that language suggests the company hasn’t gotten any closer to 7 million subscribers, and it may be losing ground — a prospect that would disappoint Wall Street.
This puts Blockbuster in prime position to begin a bloody price war, with the granddaddy of mail order movie rentals.
Even though I typically favor the underdog in a fight, I’m all in for Blockbuster on this deal. Can’t beat the ability to turn in movies at the store for more free movies.
I find the whole Blockbuster “bring your movie back to a physical brick-and-mortar” store to be a gimmick I’m not interested in. Plus, let’s remember that Blockbuster screwed us all over as hard as they could, for as long as they could, for as much money as they could. I’m very happy with Netflix. And frankly, Netflix should be able to p0wn Blockbuster on price. Keeping those physical locations has to cost Blockbuster big bucks.
Blockbuster has been slashing its number of brick-and-mortar stores, hasn’t it? That means that they’re preparing for a bloody price war, already. Of course, there are some things that you can’t get at Blockbuster because they cut inventory to only hold popular stuff. On the other hand, though, it is rather nice to be able to drive to a store five minutes away and get another movie just as quickly, rather than waiting the couple of days for your movie to get back and the new one to be mailed.
Having the online Blockbuster service couldn’t be better, especially with the ability to return them in the store and rent more dvds for free.
Jason sure likes to live in the past, huh? You know, Japan did something similar to use about… 60 years ago.
I used to have Netflicks, but my sister got the Blockbuster one, so I cancelled mine. It is great, considering I’m about 10-minutes walking distance from the nearest Blockbuster and I get free movies… what isn’t great about that?
Makes me wonder about Netflicks movie download service. Did they do that out of good faith or to entice people to come to them?
I have had two friends to cancel their Netflix because there is just not much new good content out there and as far as Blockbuster in my city they have shut down about 8 stores and left only 3 opened because the other 8 were franchise stores and closed, the other 3 are real actual blockbuster stores. Still not worth me getting blockbuster so I can drive across town to trade in my movies. But, if you live near a blockbuster it works good, a friend at work does it and gets more movies that way in a month than I do with netflix.
Screw Blockbuster. Even if Netflix folded, I’d go somewhere else.
I like the idea of NOT going to my local BallBuster store for my movies… Kinda why I did the online thing in the first place.
Blockbuster does online Jerry. The instore thing is only if you want to take it back to get a free instore movie which doesn’t hurt if you’re going by it.
Fascinating that people have such a hatred for Blockbuster.