Netflix’s online growth hit a brick wall this quarter as their revenues, earnings, and number of subscribers were lower than expected. The company reported earnings of 37 cents per share which is up from a year ago at 25 cents a share but it was lower than expected. More importantly, the company actually saw it’s subscriber count drop this quarter by approximately 1 percent to 6.74 million subscribers. The problem? In a word – Blockbuster. Blockbuster has been pushing hard to make its presence felt in the online movie rental business and as a result, the company is actually drawing subscribers away from Netflix to their service.
In an attempt to win back customers, Netflix earlier in the week announced price drops in two of their subscription services. Their $9.99 monthly plan will drop to $8.99 while their $17.99 monthly plan also drops a dollar to $16.99.
The one saving grace for Netflix at this time? Blockbuster is losing money while it tries to grab market share in the online video rental business. How long Blockbuster will continue to spend in a money losing endeavor is anyone’s guess right now. One key fact from all of this – Netflix appears to be vulnerable.
Related Posts:
