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Netflix is more popular among couch potatoes than investors a year after its polarizing decision to raise U.S. prices for video subscription services.
The unexpected twist that Netflix unveiled a year ago Thursday triggered mass customer cancellations and a sell-off in its stock, which has wiped out more than $11 billion in shareholder wealth.
Netflix has bounced back this year to revive its subscriber growth. But even after a recent rally, its stock remains more than 70 percent below its peak price of nearly $305 about a year ago, largely because of concerns about what Netflix has been spending to attract and retain subscribers. The stock gained $3.33, or 4 percent, to close Thursday at $84.97.
The company increased its prices by as much as 60 percent as part of an effort to phase out its DVD-by-mail rental service and raise more money to license TV shows and movies for its Internet video library.
Preparing for the day when DVDs become obsolete makes good business sense as the ubiquity of high-speed Internet connections makes it easier and more convenient to watch video online. Promoting Internet streaming over DVDs also helps Netflix save money on postage as it mails fewer discs.
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