» How hard will moving forward be? During yesterday’s earning report, Netflix’s CEO, Reed Hastings explained off his company’s tough year like this: “We made a couple of big mistakes this year. It’s up to us to own up to those mistakes and to move forward.” But will owning up to those mistakes be enough to stop the bleeding amongst investors? A 75 percent drop in three months — when your stock is worth more than $300 — is just insane. It dropped 36 percent today alone. If you think Netflix is going to bounce back, though, now’s the time to buy their stock.
» Oh, and it gets worse: The once-high-flying company now has 99 problems, and a shrinking stock price is one — one that dipped 26 percent in after-hours trading today. The company — which recently raised the cost of its legacy DVD plan, tried to split off DVDs into a separate site and then backed off after everyone hated it — also informed investors today that it would have a couple of unprofitable quarters as it expanded into the UK and Ireland. ”We expect the costs of our entry into the UK and Ireland will push us to be unprofitable on a global basis; that is, domestic profits will not be large enough to both cover international investments and pay for global G&A and technology and development,” the company said. CEO Reed Hastings blamed the drop in subscribers on the price increase.
It is clear that for many of our members two websites would make things more difficult, so we are going to keep Netflix as one place to go for streaming and DVDs. This means no change: one website, one account, one password… in other words, no Qwikster.Reed Hastings • In a very short post on the Netflix blog about the about-face his company did regarding Qwikster. He added: “While the July price change was necessary, we are now done with price changes.” That’s all you needed to say.
I have a feeling the apologies are just beginning. They’re catching customers off-guard by making huge changes and not providing a lot of explanation for them. It’s been handled poorly.Mike Gordon, chief executive of the corporate PR firm “Gordon Group” • Issuing his dire analysis of the Netflix/Qwikster fracas, which we spent a bit of time on last night. Basically, the big picture for Netflix of late has not been promising — their price-hikes announced during the summer sparked a non-negligible exodus from their service, with about 1 million of their 25 million U.S. customers said “no thanks.” When the company was then forced to revise their cancellation figures for the worse last week, their share prices tumbled by 25%. Then, already playing pretty fast and loose with the strength of their company, came last night’s unexpected announcement. The result? Another 4% drop in share prices. Whatever your feelings about Netflix’s corporate strategy in a vacuum, it’s clear that with real customers they’ve fouled this up to a striking extent. source (via • follow)