Netflix Lost 75% Of Its Value

Sites include Netflix.com . Published on August 18th, 2012. Written by Anthony West.

They are calling it the “Netflix deathwatch”; this after the online DVD rental and streaming movie company lost 75% of its value over the last 12 months.

Now a 75% decline in value is dramatic for sure, but many feel that the doomsayers are hyping things and predicting Netflix’s demise too soon. Despite poor results on company trading, the mass exodus that was predicted from Netflix after its 62% price hike didn’t materialize.

Although the company did lose nearly 1 million subscribers, subsequent numbers coming out of the company did report steady earnings and a healthy user base. But these numbers are not enough to get Netflix off the death watch, for many the presence of CEO and founder Reed Hastings is a big problem.

The criticism is that Hastings, aside from being a bit nutty, is out of touch with his users. Clearly the move to raise prices 62% was a bad one and it seems analysts haven’t forgiven the Netflix boss for doing so—even if users by and large are still voting with their credit cards and their fingers on the channel buttons.

Netflix’s position hasn’t been helped by the fact that shortly after it raised prices; it lost a huge chunk of content when contracts with Starz (the Murdoch run entertainment network) fell through. Right now it’s clear that there is a mad scramble to save the company. Hastings and his team must turn to the only people that can help: “Netflix subscribers”.