Netflix Explains How It Messed Up So Badly

The company irritated customers like never before

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Netflix has made some mistakes. Ever since its summer announcements of price hikes, Starz cancellations, and division launches with lame new names, subscribers have been dropping out and Wall Street has seemed unimpressed. But the company has an excuse: It's the customers fault! The pissed off customers didn't act like Netflix's previous batched of annoyed subscribers. "What we've seen in prior periods is it went to zero relatively quickly after the announcement," chief financial officer David Wells told Forbes's Jeff Bercovici. "What we saw instead was more cancels steadily throughout the quarter." In other words, Netflix angered customers like never before. But do they regret such egregious moves? No.

Asked whether Netflix would consider undoing the price hike, Wells shot the idea down, agreeing with CEO Reed Hastings that it’s better to get ahead of the trend of migration from DVDs to streaming than to lag behind it. "Lowering price or offering a three-month or six-month discount is a little bit of kicking the can down the road," he said. "It’s not going to get us back the consumers that we lost."

This article is from the archive of our partner The Wire.