Netflix has ruled out reversing a controversial price increase that sparked a mass departure of subscribers and a share price fall of more than 35 per cent thus giving cause for concern among its investors.
Reed Hastings, chief executive, said it would be “accurate” to say that “we shot ourselves in the foot with the abruptness” of a summer price increase but said the company would not change course by cutting prices.
Instead, he defended Netflix’s decision to lift prices by 60 per cent, insisting that the company’s two services – DVDs by mail and online video streaming – were “great value”.
Shares in the company, which this week unveiled plans to launch in the UK and Ireland, have collapsed since July when they touched $300. Since then a series of stumbles, notably the price increase and the widely derided plan to rename the company’s DVD operation as “Qwikster” – which the company later abandoned – have driven the price down.