Netflix Shares Soar, Site Goes Down

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It’s not a great day for the Internet, folks. Web services seem to be dropping like flies. For several hours today, WordPress.com’s back-end was nowhere to be found, causing several TechCrunch writers to consider writing on legal pads and posting on Craigslist. Some even considered posting on HuffPo. Don’t worry, they’ve been fired.

On top of this, and much to the chagrin of the video-on-demand watching public, Netflix went down for what seemed like a century. I subscribe to Netflix Instant, and as you can see from the message above, I was not allowed to watch my “programs” this evening when I wanted to. Not cool, Netflix. Not cool.

Those trying to access Netflix mobile were also shut out from using the service. Some iPad users received an error message that read, “The requested URL /WiHome was not found on this server”.

Ironically, this outage occurred a few hours after Netflix stock was upgraded to “outperform” thanks to some audacious Credit Suisse analyst, “who lifted the stock price target to $280″. Very audacious indeed. CNBC crazy man Jim Cramer agrees, saying today that he thinks Netflix is worth twice its current price. Netflix stock price hit an all-time high of $247.55 last month, and today rose 4.2 percent, to $221.88 in late trading.

What’s more, the service now boasts over 20 million subscribers and a Sandvine study showed that the service has become the largest source of U.S. Internet traffic during peak Web-surfing hours. Yes, it seems that Netflix could break the Internet — that is, of course, if the Internet doesn’t break Netflix first.

Naturally, the Web has been a-flutter with Netflix related chatter, with many of its subscribers taking to Twitter to express their frustration, like this Tweet from one Paula Simone:

“dammit! netflix isn’t working. I had to put my dvd of arrested development in the xbox by hand! BY HAND! what is this 2009?”

Of course, one Twitter user sees a silver lining for the video hub, “Netflix’s current outage and the complaints about [it] in Twitter show how integral it’s become to entertainment for the tech generation”.

Subscribers even created a Yahoo Answers thread, so you know it’s bad.

Netflix publicly recognized the outage in its own Twitter post around 4p.m. PST, but has yet to explain the cause of the outage or project a timeline for when the service might be available again. Netflix spokesman Steven Swasey said he did not yet have any details on what caused the problem.

Amazon, which has been trying to compete with Netflix in on-demand-video (and launched its instant video streaming service last month but has been forced to watch the big red video service deliver 61 percent of the Web’s total digital video. Amazon currently only offers about 5,000 titles, compared to Netflix’s 20,000+, so the eCommerce giant is likely very pleased with what transpired today, and may very well be massaging its hands and whispering “eexcellent” a la Mr. Burns.

The outage today presumably just goes to show that Netflix will have to invest more in its data centers and servers to make sure the streaming option remains available, because users likely won’t stand for these kind of interruptions much longer. Pitchforks and torches are on the horizon.

In the past, Netflix has offered credit to its subscribers following large-scale outages. It remains to be seen whether it remained down for long enough to call for such compensation, but from what I saw on Twitter, many were suffering serious abandonment issues. Some were even forced to exercise instead of watching on-demand video. I know. God help us all.

Update: As of 7:30pm, my Netflix is back up, but no official word from the company as of yet.

Update 2: We experienced some WordPress issues earlier today and, as a result, an early iteration of this post was published. Updates have been made and problems fixed. Specifically in regard to Netflix’s current stock price, which is $221.88, not $172.69. Also, according to my calculations, it is no longer Q3 2010, it is Q6 2015. Thank you for your comments.

Update 3 & 4: Our sister site Engadget (via Crain’s) brought to my attention the sad fact that Showtime will not be renewing its license with Netflix this summer and, as a result, will not renew “streaming access to older seasons of currently airing shows like Dexter and Californication”. Damn shame.

@NetflixHelps posted to Twitter at 9:30pm PST, saying that streaming is officially back online. Mobile device outages are still a work in progress, and no explanation as to the cause of the problem yet. I, personally, blame Hollywood.

Update 5: Netflix announced at 2pm Wednesday that it will be offering compensation to the streaming subscribers affected by the outage. Details to be arriving in our inboxes sometime today, methinks. I applaud Netflix for doing the right thing. After all, doing the right thing always involves giving me money.