Netflix loses subscribers to rate hike

by Greta Kaul

Netflix projects it will end September with 600,000 fewer subscribers than it had in June, suggesting the company’s recent rate increase is to blame, the Associated Press reports.

Until September 1, Netflix subscribers could pay $10 for a bundle of DVD rentals and unlimited online streaming. Now, users pay separately for DVDs and streaming, for a combined cost of at least $16 per month. It also lost a key part of its online content when Starz Entertainment ended licensing renewal talks. Netflix will lose its Starz content in March.

The loss in customers is far greater than Netflix anticipated –a potential boon for video kiosks like Redbox, the AP said.

Netflix became wildly popular as a means of at-home entertainment after it lowered prices to compete with Blockbuster Inc. in 2007. In the last three years, the company added 17 million subscribers.