Cable operators across the country weary of cord-cutting hype — not to mention Jeff “200-Pound Chimp” Bewkes and Charlie “Blockbuster” Ergen — must be enjoying a moment of schadenfreude about Netflix’s PR headache this week.
There has been an allegedly titanic customer backlash against Netflix after it announced it will hike subscription fees by eliminating bundled streaming-plus-DVD plans (see Netflix Hikes Price Of DVD-Plus-Streaming Service Up To 60%, Netflix Price Hikes Aimed At Pushing Subs Away From DVDs: Analysts and Dish Cuts Blockbuster Rates For Netflix Subs, But Still Isn’t Cheaper).
One data point: BTIG Research’s Rich Greenfield said that of 35 calls placed to Netflix customer service Wednesday, he reached a rep only 15 times with wait times between 9-15 minutes.
And according to a couple of unscientific polls, Netflix subs are steaming (streaming?) mad and about to cancel en masse.
Emphasis, though, on the “unscientific” nature of these polls — e.g., they’re for entertainment purposes and actually statistically meaningless, since the voters are self-selecting and not a random sample. If you’re cheesed off, you are 4500% more likely to vote in such a poll, according to an unscientific poll I conducted just now inside my head.
Still, Netflix will lose customers. But it’s likely going to keep adding subscribers who sign up for the $7.99-per-month streaming-only plan.
What’s frustrating for Netflix customers is that the company is now forcing them to make a choice at all. And, as one of my friends pointed out, Netflix is acting as if the catalog of ~20,000 streaming titles is roughly equivalent in value to a selection of 100,000-plus DVDs. Clearly, it’s not.
Piper Jaffray’s Michael Olson now projects Netflix churn of 4.3% in calendar year 2012 vs. his previous estimate of 4.0%. But he also expects an increase in revenue to more than offset higher churn.
Is Wall Street wrong? Did Netflix push its luck too far with the price changes? Add your unscientific comments below.
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