I see that there was a big debate late last week on the back of news that cable network Starz Entertainment will end its deal to provide movies to Netflix. Despite Netflix selling off 8.64% on Friday, billionaire Mark Cuban came to the defense of Netflix, arguing that the Starz loss was basically no big deal in the long run.
To my eye, the arguments for both sides are essentially moot points relative to the short-to-intermediate term price action of NFLX. Looking as the weekly chart below, you can see just how advanced the potent uptrend had become. It was a glorious one, to be sure, but they never last forever. Now, the issue is not whether Netflix has put in a permanent top. Instead, the focus is on at least resetting the base count over the next few quarters. The idea is that all good news looking out over the next few months had already been properly priced in during the stock’s meteoric rise.
While the news about Starz may not be a major negative for Netflix in the grand scheme of things, it likely serves as an excuse to push the stock in the direction it appears to want to go now, which is down and sideways to fill out a chart that had simply become too good to be–and stay–true.
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As a long time member, I finally switched to the Streaming Only plan. No need to pay $18 a month for 1 DVD and the Blu-ray option. No with all the options today. Seems like NFLX is just not worth that and it’s time to come back down to earth. See ya at $55 a share.
Starz is a huge deal. It’s one of the main reasons why I even stuck with the streaming option. The movies listed are alright but Starz added a lot.
This price hike.. has cost them hundreds of subscribers who just flat out quit the service and thousands who went for the lower option.
It’s going to be reflected in the next earnings release. No breaking profit records for these guys.
Let’s also not forget that the streaming basically sucks because the movie selection is poor, and that is with starz. How will they improve on this now?
Anyone who has a kid knows that the childrens’ selections alone make this a no brainer for $8 per month. That’s the price of 2 coffees. This may have been done to intentionally drive folks to streaming only. They dont have to deal with the costs of the envelopes, restocking the physical dvds etc. And i think that people are more likely to try Hulu and other streaming services in addition to, rather than in place of, the streaming NFLX service (because its so cheap) So in that sense, it could have been a defensive move against Hulu, Amazon prime, Apple TV etc.
Almost signed up before they changed the rate plan. I was not going to pay twice as much so I decided not to. Besides subscribers that canceled, how many did not sign up because they increased rates?
I am the karma fairy I have come to give everyone who has commented a thumbs up.