Many Wall Street analysts have applauded the moves to push customers toward the higher-margin streaming business as a smart long-term strategy and said the price hike was needed to pay for increasingly costly content. Hastings has stressed the company sees its future in streaming as customers increasingly turn to a variety of Internet-connected devices for entertainment. Netflix may be preparing to eventually sell the DVD business, some analysts said. The pricing uproar and the collapse of talks with movie-content provider Starz have driven Netflix shares down nearly 50 percent since it unveiled the price increase on July 12.Īnalysis: Netflix's new name is slow to catch hold The news came a week after the company said it was adding fewer subscribers than forecast because of a price increase as high as 60 percent, or $6 a month, for joint streaming and DVD rental service. The announcement could cause more cancellations of monthly Netflix subscriptions, some industry analysts said. Netflix shares dropped 7.4 percent to end at $143.75 on Nasdaq. It will reside separately from the Netflix website, where instant streaming of television shows and movies will be offered. Hastings, in a blog post late on Sunday, said Netflix was changing the name of its DVD-by-mail business to Qwikster, the brand that will appear on the company’s signature red envelopes, and also offer video games. Chief Executive Reed Hastings admitted to “arrogance” over failing to adequately explain the changes in an apology that rang hollow to many customers.
Negative comments piled up on the company website on Monday, a little more than two months after Netflix raised prices for DVD services.
A screen grab shows the access to Netflix online, as displayed on a television screen, in Encinitas, California July 25, 2011.
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