Netflix Says Third of Current Subscribers Came Back After Leaving Due to Price Hike
posted Friday May 25, 2012 by Nicholas DiMeo
It seems that Netflix's new programming announcement may have been just the ticket to get more customers to sign up for the service. Either that, or the ones that left have realized nothing better is out there and have now come back to the movie and TV-streaming company. Yeah, it's definitely more the second one. A spokesperson from Netflix said that nearly one-third of all the new customers lately were previous Netflix customers who have come back to daddy after leaving the house and seeing that the rent next store is too high and doesn't offer nearly the same amenities.
Netfix CFO David Wells also mentioned this in a conference with JP Morgan and Telecom. Wells went on to describe the effects of churn and how it ties into customer satisfaction and the general feel of Netflix's brand. It's been almost a year since the treacherous price hikes, however it seems Netflix has managed to wait out the storm and is on the uptick. Things like buying DVD.com and strong Q1 numbers can lead to another year in the black.
We have an excerpt from the conference call.
I think we're feeling really good about the brand, the progression that we had from last year. We think there's room to grow, but the improvements in retention and our growth in Q1 and Q2 since Q3 and Q4 of last year make us feel pretty good. Rejoined or folks rejoining the service still remain about a third of our new subscribers that are coming in. So that is an encouraging stat. We think, we've said before that the brand hit will take years to recover from and I think that's still true, with the bulk of the recovery coming in the full year and I think we still feel that way.
Netflix considers "rejoins" a category in which a customer leaves the company but comes back in less than a year. Netflix is able to match addresses and credit card data to measure this statistic and is able to keep and track this previous data for up to one year. Wells said that once a customer comes back, they're usually staying for good, but with new customers, it takes them staying subscribed for long periods of time in order to keep them at the table. The one month trials probably aren't the only thing driving retention.
Numbers going up is always a good thing for a company, especially one that suffered a sharp drop of 800,000 customers in such a short time. Wells did say that the negative media news about the company should "dissipate over time." We agree and were behind Netflix since the beginning of the price hike but felt they were too easily swayed by their 30,000 angry Facebook trolls and didn't need to confuse customers with the whole Qwikster thing. Seriously, does anybody have some promo material from that brand? We want an envelope, signage, a coaster, anything!
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