NFLX Stocks Drop as 200,000 Customers Cancel
Netflix is feeling the strain for the first time since it secured itself as the authority of online movie and television rentals.
Netflix came online in 1999. Working on a subscription and streaming based click and pick rental system, it began using the Internet as a means of mailing movies out to customers in using a no late fee flat monthly rate.
Over a decade later and Netflix has shipped out over a billion movies and has successfully dethroned companies like Blockbuster as the monopoly on top of the food chain.
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However, Netflix recently implemented a new policy forcing some of its users to pay a higher fee. Since then, Netflix has seen its biggest increase of cancelations to date. As of this morning, stock has dropped 15 percent already.
The 22 million or so subscribers were paying $2 additional for mail in DVD's as well as being able to stream movies and TV shows. Now each service will cost $8 each.
Despite estimates of nearly 200,000 people dropping off of one or both of the features, Netflix still remains optimistic of its long term goals.
"Despite the guidance revision, we remain convinced that the splitting of our services was the right long-term strategic choice," Netflix said to its shareholders in a letter Thursday.
Chief executive of Netflix, Reed Hastings, promised that the increased revenue will go to the sites development and streaming services in hopes of making the company better in the future.
