During yesterday’s earnings call Netflix CEO Reed Hastings had a few words to say about the recent price hikes put in place by the company. Surprisingly, Hastings didn’t seem too worried about the outrage that swept the web following the announcement.
Hastings wasn’t too worried because he actually expected worse. On the earnings call he said “believe it or not, the noise level was actually less than we expected, given a 60 percent price increase for some subscribers.” He said Netflix knew what was going to happen, and the company tried to be as straightforward as it could with the announcements. Hastings still expects some users to leave Netflix, but after the changes take effect numbers should even out again as new users sign up. Sounds like a fairly well calculated risk, even if ti does mean a third quarter that isn’t as great as it could have been.
The big question facing Netflix now is not how it will deal with costumers angry over the price hike, but how it will make the service better. Hastings has to sign a new deal with Starz next year when it expires. The company also has to work on making the streaming library a bit larger. The current library is pretty large, but it still lacks a number of big movies and TV shows. Netflix might not be able to get HBO shows on streaming, but it’d be nice to see a few more recent releases available on streaming.
Read [All Things D]