As mentioned earlier today at the J.P. Morgan Technology, Media and Telecom Conference, Netflix CFO David Wells stated that 33 percent of new subscriptions to Netflix are from people that cancelled the service within the past twelve months. According to Netflix policy, the company holds onto customer data for approximately one year. This allows the company to compare information such as credit card accounts and mailing addresses to prior accounts. During the second half of 2011, Netflix altered the monthly subscription price of the streaming service plan and one-DVD-at-a-time plan from $9.99 to $15.98. This move completely drove away some Netflix subscribers when the plan went into effect on September 1, 2011.
Wells partly attributes negative coverage of the company as a cause of the decrease in subscribers during the second half of 2011. At the conference, he stated “Even streaming-only subscriptions, who should not have faced an impact, reacted to last year. We think that’s a result of the negative PR, the swirl that was around the brand and the company will dissipate over time. We even saw that in Canada, which you could argue should not have seen it.”
Beyond the pricing changes, Wells was also referring to the missteps taken with attempting to split off the DVD rental business under the Qwikster brand, then reversing that decision approximately one month later.
Since then, Netflix’s subscriber base has grown over 2012. According to a recent quarterly report, the company added 1.7 million new subscribers during the first three months of the year. While Netflix has lost a large collection of popular movies due to Starz’s departure from the streaming service, the company is investing in original programming and bringing back popular franchises like Arrested Development. In a recent deal with EPIX, Netflix has negotiated the rights to offer both The Hunger Games and The Avengers to streaming subscribers ninety days after the films appear on EPIX. Films appear on EPIX approximately four to five months after being released on physical disc, thus Netflix will be offering the two popular blockbuster movies to streaming users seven to eight months after the DVDs and Blu-rays are released.
Netflix is also quietly rolling out upgrades to the streaming video, user interface on the Web and platforms like game consoles. As noted by GigaOm earlier today, Netflix has updated the Web application to allow users to browse episodes of a television series while watching an episode. The preview for each episode includes the title, a short description and a screenshot from the episode. The user can also navigate through different seasons of the television series and check to see which episodes have been watched already. When the current episode is paused, an overlay will appear on the screen that displays the episode title and description.
The control bar also offers subtitle controls, alternate audio tracks if available, the setting to switch HD quality on and off, a video scrubber that offers a real-time preview of various portions of the episode and a full-screen mode to expand beyond the browser window. The video player also resizes to the dimensions of the browser window, thus allowing a subscriber to watch a video while using another window.