Netflix is awesome, right? Without the streamer we wouldn't know how to binge watch or what "Peeno Noir" is. Plus, the world would be without so many cool shows and perfectly valid reasons to never leave the house on weekends. Well, nevertheless, Netflix has been having a little trouble holding onto its subscribers lately, and the streaming giant seems to think that something in particular, other than itself, is to blame.
The company's second quarter report just came out and Netflix CEO Reed Hastings is claiming (via Recode) that the media is actually to blame for their recent inability to hit their subscriber numbers for Q2. Here's what he said:
We are growing, but not as fast as we would like or have been. . . . Churn ticked up slightly and unexpectedly, coincident with the press coverage in early April.
Oh, no he didn't! OK, maybe that wasn't the most out-in-the open way for Reed Hastings to pin the Netflix Q2 downslide on the media (since he didn't come right out and say "You screwed us, media!"), but just wait until I break it down for you. Apparently, Netflix missed their projections for both their U.S. and international numbers. Instead of 500,000 U.S. subscribers, the streamer only added 160,000, and instead of 2 million international subscribers, the service topped out at 1.5 million. Hastings' story is that they actually added the number of subscribers they were expecting to. But (and here is where the media comes in), the thorough job media outlets did of reporting the recent Netflix price hike that un-grandfathered millions of subscribers, and led to slightly higher monthly fees for the service, caused an exodus that drove their numbers down. Numbers for the third quarter have also been below projections.
A few months ago Netflix announced that a price hike was coming for new subscribers. The price for the Standard Plan went up from $8.99 to $9.99 a month. That was probably pretty easy for newcomers to deal with, but the trouble came, as Reed Hastings stated, early in April when news came that millions of subscribers who've been part of the service for years, who thought they'd be grandfathered in, found out that their own higher pricing was coming much sooner rather than later, and that by the end of 2016 pretty much everyone would be getting the new, higher prices.
As you can probably imagine, even though the new price for Netflix service isn't much higher than before, people who thought they would never see anything besides $8.99 monthly were pissed when they started getting notices that they were no longer grandfathered in at the lower price. And, so, subscribers started to flee, mostly feeling that they'd been misled by Netflix. Now, it's completely ridiculous for Reed Hastings to blame the media for simply reporting the facts behind their new pricing, but it makes sense that Hastings wouldn't want to accept the role that Netflix played in missing the mark for Q2. Well, all the company can hope for is that no noticeable number of subscribers will cancel the rest of this year, or 2016 could turn out to be a kinda crappy year for Netflix all around. Either way, the media will have very little to do with it.