After watching Netflix stock take another tumble yesterday, falling a further 35% as analysts suggested selling and abandoning the company for dead, I found myself wondering, are things really that bad for Netflix? So, I looked back at the company’s recent past on the NASDAQ index, and found… Yeah, they’re kind of horrific. Want to see how Netflix is doing on the stock market? Look at the activity over the last six months:
See that slow decline becoming a much faster decline somewhere around September? Wonder what that’s all about? Here’s a timeline of Netflix’s major headlines over the past three months to explain:
Jul 11: Netflix announces changes to pricing structure
Jul 13: Stock hits all-time high of $298.73
Sep 15: Netflix estimates loss of 1M subscribers, stock drops to $169.25, or pre-2011 level
Sep 19: Netflix announces separation of businesses into Netflix (VoD streaming) and Qwikster (DVD rental), stock drops to $130.03 (lowest amount since August, 2010)
Oct 9: Netflix reverses Qwikster plan, stock drops to $108.66 (lowest amount since June, 2010)
Oct 23: Netflix announces earlier-than-expected expansion into Europe, stock rallies slightly to $118.84
Oct 24: Netflix confirms loss of 800,000 subscribers, stock drops to $77.35 (lowest amount since April 2010).
Short version: After solid growth throughout its existence, Netflix has lost more than two-thirds of its value in a little over three months, and is now worth less than half of what it was worth a year ago.
(MORE: Netflix Loses 800,000 Subscribers After Price Hike, Qwikster Debacle)
And for what? Taken separately, there’s nothing appropriately apocalyptic about either trying to pass on increased costs to customers through a restructuring of fees, or even trying to concentrate on the streaming video market by spinning off the original DVD business, however ineptly it may have been handled. But it’s the combination of those two things – especially the ineptitude of handling of the latter – which, when combined with the company’s seeming inability to win back its customer base even when entirely reversing its plans (a move that, instead of mollifying those complaining, just seemed to strengthen claims about the irrelevance and powerlessness of Netflix chiefs), paints a picture of a company that has lost its way so entirely that it may never find its way back.
By this point, things may have become a self-fulfilling prophecy, with freefalling stock prices prompting analysts to declare the company finished, which will lead to more dumping of stock, which may lead to the company actually being finished. Can things be turned around? Of course—but I can’t imagine how, or at least, any way for it to happen quickly. The idea of essentially operating in the red for the entirety of 2012 in order to establish the company overseas now seems like an unwise indulgence, and what does that leave for the company? What content partnerships would Netflix have to announce to lure back the disappeared subscribers, and what terms would the company have to agree to in order to get those partnerships? Can they afford to drop subscription costs even as content providers demand more for programming?
I doubt that Netflix will ever disappear entirely; if nothing else, the brand name is recognizable and valuable enough that, even if the current Netflix dies a sad death, someone will likely use the name for something else down the line. I agree with Matt; I think that the future of video is online, and I think Netflix had the right idea, at its heart. But just because they were right doesn’t mean they’ll survive. Look at Betamax for an old example of proof for that idea. And, I have to admit, there’s an odd irony in the idea that, for all its success and forward thinking, Netflix may end up in the same in-name-only state as Blockbuster, the video chain it replaced for most people.
MORE: The Digital Media Revolution: Analog Strikes Back
Graeme McMillan is a reporter at TIME. Find him on Twitter at @Graemem or on Facebook at Facebook/Graeme.McMillan. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.