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The third quarter report for Netflix is in, showing the impact on the company of the change in their rate structure that was announced in July and hit consumers this month. Not surprisingly, Netflix is down 13.7%, and the company has fallen short of its expected subscriber numbers in both the streaming and DVD markets. Netflix execs have responded with an interesting look at the future.

This morning Deadline predicted a painful day in the market for Netflix – something most of us saw coming from a mile away. No surprise when the story was updated with the news of the share price’s rough day. And the future is looking grimmer still; when Netflix loses its contract with Starz in February more subscribers are expected to jump ship. The rocky ride for Netflix that started over the summer looks likely to continue into next year.

Netflix executives have responded to the bad news with a glimpse at where the company is hoping to take its streaming service in the future – and a sign that the DVD by mail system may soon be a thing of the past. Netflix plans to shift its focus to television series available to stream rather than movies, according to chief content officer Ted Sarandos, and DVDs are on the way out:
(Although) the DVD business has a long life in middle America, it’s just not part of our future.”
Where and how Netflix is going to obtain the kind of television series’ for its streaming services that will keep subscribers hooked and bring in new ones is the question at hand now. The decision to move into television puts Netflix in direct competition with Hulu, even more so than they are now. New shows, better shows and quicker turnaround is going to be the key to keeping Netflix alive in the streaming TV arena.

Watching Netflix try to keep its head above water may just turn out to be more entertaining than anything they offer via streaming or via DVD.