Survey Says 30% of Netflix Subs Could Depart20 Sep, 2011 By: Erik Gruenwedel
Survey by research firm Frank N. Magid predicts greater than expected subscriber backlash against price hikes and disc segregation
As Netflix scrambles to contain the fallout from disclosing a higher-than-expected subscriber exodus, new research data suggests the decline could be a lot worse.
Minneapolis-based Magid Associates found that in a survey of 1,000 respondents conducted the week of Aug. 22, 16% said they would cancel their subscriptions, while another 14% say they are seriously considering it.
More troubling, almost 60% of Netflix subscribers use competitor Redbox, and 30% of them indicated they would use Redbox more in the future due to the price changes from Netflix.
Netflix Sept. 1 raised the price of its popular combined disc and streaming plan 60% to $15.98 a month — a move that resulted in a blog-based backlash followed by departing subscribers. That catalyst now has been exacerbated by Netflix’s hastily created Qwikster DVD rental platform — a service that is incompatible with Netflix — and co-founder and CEO Reed Hastings’ much-criticized mea culpa Sept. 18.
The report underscored rental consumers’ concern with pricing and ongoing interest in disc rentals and kiosks.
“A major reason that many consumers are not happy with their Netflix service is due to the quality of the content selection in the streaming service,” said Mike Vorhaus, president of Magid Advisors, a unit of Frank N. Magid Associates. “Netflix will need to improve the breadth and timeliness of their streaming content to rebuild major consumer momentum.”