The internet business is a pretty tricky thing to keep one’s thumb on. Especially when you are in charge of hundreds of thousands consumers ready for their on-demand entertainment. That’s why it was especially puzzling when Netflix CEO Reed Hastings decided to belly up to the DVD/VOD war and claim Qwikster would be his champion.
That’s when things got tricky, as Netflix subscribers were fleeing the scene, hoping this meant they wouldn’t have to spend double the amount they were spending to get the same DVD and streaming service. Now that Qwikster is dead and gone, it seems that the original company is still suffering from its mistake. From Variety:
While investors were disappointed with the reported decline of 810,000 streaming subscribers in the second quarter, some equally depressing projections for the final months of 2011 also contributed to a 27% drop in after-hours trading, sending the stock to $85. It had opened the day at $119.37.
Netflix foresaw a continued decline in the fourth quarter, with streaming subs possibly slightly below the 21.45 million registered at the close of the third quarter. That’s down from 24.59 million from the quarter before.
DVD subs are also expected to decline in the fourth quarter, even though the holiday season is typically a healthy period for Netflix.
Does this mean the end of Netflix? Where are people going now that they don’t have a subscription anymore? Will competitors like HULU or (gulp) Blockbuster take this as a sign to step up and claim these entertainment-less consumers? The coming months will definitely tell us.
