Nothing’s looking up for Netflix
Posted September 21, 2011 at 11:25 pm in At the Movies, Blogs
It is no fun being Netflix these days. Its plans for new headquarters at Los Gatos hit a major road block after a residents’ group, Los Gatos Citizens for Responsible Development, filed a lawsuit against the town for approving the company’s five- and four-story buildings despite a stipulated town height of three stories.
In addition, the company’s plans to split its business into separate DVD, called Qwikster, and internet streaming services, to be called Netflix, has led to discontentment amongst its subscribers. CEO Reed Hastings’ blog post announcing the decision witnessed several sharp comments as people didn’t seem too happy with the change. Most of them lambasted him for making life more difficult for about 12 million customers who get both streaming and DVD rentals. Those people will have to visit two websites to make requests and update their billing information.
In July and August, an increase in prices from the company led to several customers discontinuing their contracts. As a result, the company’s stock and brand values deteriorated sharply. From being one of the big guns at Wall Street, with a share price of $300 in early July, it has tumbled down sharply to $143 per share at close Sept. 19.
The declines were precipitated by Netflix’s warning that it expected to have 600,000 fewer subscribers at the end of September than at the end of June, by far the worst downturn in the company’s history.
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