Netflix stock plunged Thursday and Friday on the news that the company lowered its subscriber growth forecast.
But here’s the thing: All those subscribers Netflix is losing?
Part of the plan.
Or at least that is a theory Peter Kafka posits at All Things Digital.
See, Netflix has been pretty open about its desire to get rid of, or at least limit, its DVD-sending business. That costs money and takes time.
Streaming is the future, and Netflix wants to go in that direction.
The subscribers they are losing due to the price hike are primarily ones that require DVDs. Only 200,000 of the one million lost are streaming-only subscribers. So that’s not a huge long-term loss, really.
The company’s stock has come crashing back to earth in the past few months, but Kafka thinks it will be OK in the long run.
In fact, “losing the Starz deal, which will keep Sony and Disney films out of their hands (for now) seems like a much bigger deal,” he writes.
As always, content will remain king.
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