Netflix Announces Dip In Subscriptions

July 24, 2007 | by Christopher Nickson

Neflix has announced its first-ever drop in subscriptions for the second quarter, in the face of competition from Blockbuster.

For the first time, Netflix has reported a quarterly drop in subscriptions, and has issued warning on subscriber numbers, revenue and profit for the year in the face of stiff competition from Blockbuster.
 
Blockbuster has already said it will spend $170 to push its Total Access program, under which customers can rent DVDs online and swap or return them at a Blockbuster store.
 
In response, Netflix has cut a pair of its subscription plans, to $8.99 and $16.99 respectively, to compete directly. It had previously cut two other plans by $1 each.
 
Netflix was the trailblazer of online DVD rentals, and has actually still beaten projections from Wall Street, earning 31 cents per share, compared with the Wall Street target of 25 cents. Net income for the quarter was $25.6 million.
 
Chief Financial Officer Barry McCarthy was pessimistic about the immediate financial picture.
 
“When Blockbuster decides to operate its online business profitably, our financial results will improve also, but until that time both subscriber growth and earnings will remain under pressure.”

Post Your Comment...Comments

Be the first to comment on the article!

Comment on this article




Please keep your comments relevant to this article. Email addresses are not displayed, they are only required to verify you are human.

When you submit your comment, an email will be sent to your email address with a confirmation link. Once you have clicked on that confirmation link your comment will be posted.

HTML is not allowed.


Join our newsletter to keep up to date on the latest Digital Trends content like Videos, Reviews, News and more delivered directly to your email!


Plus, get early access to contests and specials from our partners. Join today!





Loading...