11. Netflix: The Customer Strikes Back

Introduction

Three years after earning his MBA, Hunter Keay was starting to make a name for himself at a leading investment bank when, in February 2012, some of his clients grew increasingly anxious about the value of their holdings in Netflix, Inc. (Netflix), the subscription-based media distribution company. Six months earlier, Netflix had announced a plan to split its on-demand video streaming and DVD mail delivery into two businesses and to increase the price of its most popular service. But in the face of near-universal criticism, Netflix had abandoned the plan within a month, only to lose 800,000 subscribers and half its stock value (Figure 11-1). Keay’s clients who held Netflix wanted to know what ...

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