Research contends 30% of Netflix subscribers could cancel

A whopping 30 percent of Netflix (Nasdaq: NFLX) subscribers are considering dropping the streaming video service, a cable industry research firm contends.

Frank N. Magid Associates said 9 percent of subscribers interviewed in August--just before the price hike took effect--said they were considering cancelling the service because it cost too much; another seven percent said they were cancelling for reasons unrelated to the price hike.

Magid, which interviewed 700 subscribers and 350 non-subscribers, said 14 percent more were "seriously considering" cancelling.

"A major reason that many consumers are not happy with their Netflix service is due to the quality of the content selection in the streaming service," said Mike Vorhaus, president of Magid Advisors, a unit of Frank N. Magid Associates. "Netflix will need to improve the breadth and timeliness of their streaming content to re-build major consumer momentum."

The survey showed some 60 percent of Netflix users also use Redbox, the kiosk-based DVD distribution company, and almost one-third of them said they'd likely increase the amount they use the Coinstar service because of the new Netflix pricing.

Starting Sept. 1, Netflix started charging customers who both stream video from Netflix and order DVDs by mail $15.98 a month, a 60 percent price increase. Subscribers can also opt into using only the streaming or mail delivery service for $7.98.

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