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Netflix Raises Prices, Lowers Investor Confidence Netflix has reached a new low as it broke its 52-week low, erasing 12 months of considerable growth. This news happening after massive losses of users after Netflix announced in July that it was raising the price of its most popular subscription plan by 60%. A move Netflix officials say is necessary to maintain the entertainment subscription services offered by the company amidst higher costs and changes in the broader state of the economy.

Despite being the largest single entity consumer of internet Bandwidth in the world, Netflix has had its ups and downs over the past year. Two financial firms, Barclays Capital and Goldman Sachs, have lowered their expectations of Netflix for the near future. Goldman Sachs has reevaluated the stock to be $270 per share, from earlier estimations of $330 per share. Likewise, Barclays Capital has evaluated Netflix stock to be $260 down from a more optimistic $285.

Rounding out the poor financial news is Caris & Company's downgrading shares of Netflix from above average to simply average. Financial institutions have become very worried about the struggling corporation after its reports of subscriber loss in Q3. All of Netflix's financial problems began when it announced last week that it would lose one million subscribers in the Third Quarter of 2011, with a potential further loss for the Fourth Quarter.

Analysts have been at odds over whether Netflix has made the correct decision in its sharp price hikes in its most popular plans, some analysts believe that the customers who remain with Netflix will do so despite the increase, and will ultimately prove to be a profitable decision for Netflix.

In stark contrast, opponent critics of Netflix believe that the core of the business has been sacrificed, and that Netflix raising its prices 60% was an alienating decision to its longtime customers who had previously held Netflix business operations in high regard. Critics go on to note that Netflix has come up against several competitors for media consumption, from Youtube and Twitter to Hulu and Facebook, it seems that all of Social Media is supplanting the demand for traditional media sources, such as DVDs.

Both the DVD Delivery services as well as Netflix's streaming service have been affected by the subscriber loss, and further losses are expected in the near-term. Netflix has also announced its corporation would be split into two services, with Netflix maintaining its media streaming service, and a new company, Qwikster, will be formed to handle all mail DVD deliveries. The reasoning behind this split is so that each company can focus on its own logistical problems and can maintain growth individually.

Consumers have responded with puzzlement at the decision, and Netflix must act to.