Piper Jaffray: Consumer Unrest Stabilizing at Netflix
Piper Jaffray: Consumer Unrest Stabilizing at Netflix
Posted 09/30/2011 at 8:05am
| by Paul Lilly
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The consumer outrage over Netflix's recent price hike and even more recent announcement to spin off its DVD-by-mail service into a completely separate business has been well documented here and elsewhere on the Web. Now that the dust has had some time to settle, are subscribers ready to forgive and forget, or at the very least move on? Researchers at Piper Jaffray seem to think so.
Piper Jaffray, an investment banking firm that sells financial advice, released a report that includes a survey of 250 Netflix subscribers. The survey is a follow-up to a similar one conducted in August with 350 respondents. Both represent a tiny sample size compared to Netflix's subscriber base of 24 million customers, but Jaffray pulled some positives out of the results nonetheless.
Of those surveyed, 10 percent now say they plan to quit Netlifx. That's down from 15 percent in mid-August, a drop Jaffray believes is indicative of waning consumer unrest.
"We believe our survey shows that subscriber cancellations are stabilizing after being higher than expected for the majority of Q3," Jaffray stated in its report. "While we continue to expected elevated churn over the next few quarters, the risk of mass exodus appears to be moderating following our mid-September survey."
The survey also showed a rise in interest in on-demand rentals from Amazon and iTunes. Of those who plan to quit Netflix, 23 percent said they'd turn to these services, up from 15 percent in August. Most still plan to rent from Redbox, though that number dropped from 56 percent in August to 42 percent in September.
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kixofmyg0t
September 30, 2011 at 11:50am
I never understood why so many people were "outraged" by Netflix's "price hike". I only use the streaming service though.
bling581
October 03, 2011 at 9:58am
Gdf said most of it, but for me it's also the reason. Netflix stated that they figured in the "long run" they can't afford the costs of sustaining streaming + DVD's with the rising costs of aquiring streaming content and they were moving toward a streaming only company. The price hike is Netflix greatly pressuring people to choose one or the other.
gdf
September 30, 2011 at 12:02pm
62% price hike in less than two years (at least for me) and poor streaming selection that was getting worse.
Paying more for less = outrage
And the prospect of two accounts, two queues, two websites didn't appeal to me either.
gdf
September 30, 2011 at 11:39am
"Of those surveyed, 10 percent now say they plan to quit Netlifx. That's down from 15 percent in mid-August"
Perhaps the number is lower because THEY ALREADY QUIT! I planned to quit in August and actually quit in September!!
I was going to wait until there was a better alternative or Netflix got better. But Netflix expedited the process.
bling581
September 30, 2011 at 9:45am
I'm not cancelling, but I'm going to drop the DVD option after I get through my queue. I was only watching a handful of movies a month but now I'm sending them back every 2 or 3 days.
Raswan
September 30, 2011 at 8:48am
This survey is a joke. A 250 sample size out of 24 million? That's 1/10,000, or .0001 percent of the subscriber base. Not even close to enough needed for real analysis. A downard shift from 15% to 10% means that of the people they surveyed, 37.5 said before they were planning on quitting, with 25 now saying it. So you're giving a prediction based on a movement of 12.5 people out of 24 million. Retarded. With a sample size this small (and where, pray was it conducted?) your largest swing (14%) is well within the margin of error. In fact, your whole sample size is smaller than any reasonble margin of error.
How about someone do a real survey? Then maybe we can all stop talking about Netflix's (overhyped) downward spiral, and onto something else equally speculative and unrealistic?
iceman08
September 30, 2011 at 9:19am
And it's not the only sample obtained from 24 million people. you CAN draw more samples to get a statistic, which helps establish a parameter for the population
iceman08
September 30, 2011 at 9:18am
It's a real survey in the fact that it's a parameter of the population. Samples are used when you're measuring data from a smaller group.
explanation of a parameter: "Parameters are often estimated since their value is generally unknown, especially when the population is large enough that it is impossible or impractical to obtain measurements for all people. For example, it would be impossible to line up all adult human males on the planet and obtain their heights with perfect measurement, therefore, the true mean height of adult human males can only be estimated, not known."
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