30% of Netflix subscribers said ready to bolt
And the hits just keep on coming.
As if CEO Reed Hastings didn't have enough to worry about, a new study suggests that around 30% of Netflix subscribers either plan to cancel the service or are seriously considering moving to a competitor, according to a survey of 1,000 subscribers by media research firm Frank N. Magid Associates
In July, Netflix announced plans to start charging $8 per month to access movies and TV shows via streaming and an additional $8 to acquire DVDs. Netflix previously charged $10 for both discs and streaming. The company said last week that it now expects 1 million fewer U.S. subscribers in the third quarter than anticipated in July.
Netflix CEO: I messed up
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On Sunday evening, Hastings offered an apology in a letter to customers for the way the company announced the separating of the streaming and DVD subscriber plans. He also said Netflix would split itself into two separate services. The new Netflix will be involved in streaming video over the Web exclusively, while the other service, called Qwikster, will oversee DVDs by mail.
Hastings said in his note to customers Sunday evening that he believes moving DVD-my-mail operations will allow the streaming service to grow unencumbered. But subscribers, pundits, and financial analysts have ridiculed the plan on nearly every level. Some say that dividing the company will create confusion and hassle. Some say that Netflix risks losing customer faith and even some don't even like the name of the new DVD service.
But it's not only price-sensitive customers who are chafing. The survey finds that many subscribers also are unhappy with the quality of the content selection in the streaming service, according to Mike Vorhaus, the president of Magid Advisors, a unit of Frank N. Magid Associates. "Netflix will need to improve the breadth and timeliness of their streaming content to re-build major consumer momentum."
Meanwhile, shares of Netflix continued to slide with the stock setting a new 52-week low at $129.50, before rebounding slightly in mid-afternoon trading.
CNET's Greg Sandoval contributed to this report.