Stock value takes a major dive overnight.
It didn't take a genius to know that the Netflix price increase would have an adverse effect on the video rental and streaming service -- and don't even get us started on the Qwikster debacle -- but the proof is in now in the pudding, and things aren't looking good as new reports show a hefty drop in American subscribers.
According to Q3 statistics, 800,000 viewers have ditched Netflix for greener pastures since the previous quarter, down to 23.79 million from 24.59 million in Q2. In addition, Netflix has reported that this dip consisted of more long-term customers than they had expected.
Although news that Starz would not be renewing their contract may have played a role in some of these subscribers jumping ship, streaming and rental alternatives like Amazon's instant video service and Red Box kiosks have likely contributed as well.
To make matters worse, Netflix stocks dropped 37% overnight, from $119 to $74.90 a share. The resulting loss is a massive $2.3 million worth of the company's market cap.
Things aren't all bad for Netflix though, as recent deals with DreamWorks Animation and the CW should help keep them healthily afloat for the time being.
Subscriptions for the service currently cost $7.99 for either streaming or DVD-only, or you can pick up both for a rather non-tempting price of $15.98. Learning from their ways, Netflix has established that they have no intentions of increasing the prices again "for a long time."
