UPDATED 14:04 EDT / SEPTEMBER 15 2011

Netflix and Hulu Suffer From Their Huge Mistakes

After Netflix announced their 60% price hike back in July, they have been bombarded with harsh words from an angry mob of subscribers who voiced their anguish on Facebook and other outlets.  Netflix was a bit too confident and stood by their price increase, relying on the fact that they have millions of subscribers from the US and Canada.  A few thousand angry customers won’t hurt them, right?

Boy, were they wrong.  It’s as if someone served them a piece of humble pie–their shares are down by 16% or %176.06 at today’s market opening and for the last three months, shares were down by 19%.  The price drop happened hours after Netflix’s price increase took affect.  And it’s a huge difference from the 46% increase they experienced a few months back.  Though Starz Entertainment ended their partnership with Netflix leaving a hole in their entertainment library, they are still sticking with their price hike, hoping that consumers will eventually accept the change.

“We know our decision to split our services has upset many of our subscribers, which we don’t take lightly, but we believe this split will help us make our services better for subscribers and shareholders for years to come,” Netflix said.

But Netflix isn’t the only online video streaming service that’s made some questionable decisions lately.  Hulu’s aim to extend their reach in Europe is still a dream, as RTL chief executive Gerhard Zeiler hasn’t made a deal with the company and told “the Royal Television Society Cambridge Convention that aggregators such as Hulu, which is owned by US media companies News Corporation, NBC Universal, Disney and private equity company Providence Equity Partners, would fail unless they allow broadcasters to promote their channels rather than individual programmes on their video-on-demand service.” Hulu has yet to launch in Europe.

Furthermore, Zeiler stated that, “Two years ago Hulu came to Europe and after two years they have not done any deal because all the broadcasters have said ‘we won’t let you turn our [advertising] euros or pounds into cents’,”

“We said, ‘we want to sell our own advertising, we want to determine the price’ and that’s not something they [Hulu] could to deliver to us.”

“We can’t allow someone else to disintermediate. In a universe with one thousand different choices you need guidance.”

Aside from that, Zeiler is skeptic about internet TV and that 10 years from now, normal users would just use it to watch TV without the need to connect it.  We’ll see where that line of thinking takes us.


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