The company said it ended the second quarter with 83 million subscribers, adding a new 1.7 million customers. In previous quarter, Netflix added 6.74 million total subscriber additions, 2.23 million in the US and 4.51 million overseas.
Advertisement
But at the end of June the company had more than 83 million subscribers – 47.13 million USA domestic streaming customers, and 36.05 million in global markets.
In a letter to shareholders, CEO Reed Hastings chalked up the lower numbers to “churn”, which is a fancy way of saying unhappy subscribers up and quit Netflix. Netflix said that cancellations rose slightly in early April following press coverage regarding the coming increases. Netflix reported revenues of $1.96bn for the second quarter, up from $1.4bn a year ago. Earnings per share was at 9 cents, up from 6 cents past year.
Netflix shares dropped to $84.40 in after-hours trading from a close of $98.81.
After years of spectacular success, Netflix Inc is starting to hit some potholes.
Revenue for the quarter rose 28% to $2.1bn, driven partly by Netflix’s higher prices. Instead, it added 1.5 million internationally and 160,000 in the US.
This is the lowest quarterly gain in USA customers reported since Netflix split its video-streaming and DVD-by-mail services five years ago. With 47.1 million US subscribers already signed up in the USA, where they pay $8 to $12 per month, the company is having more trouble finding new households interested in anteing up. “With our large subscriber base, slight variances in retention versus forecast can result in significant swings in net adds, particularly in a seasonally small net add quarter like (the second quarter)”, he said.
In the US Netflix’s Q2 net additions were 01.6m against a forecast of 0.50m.
Customer growth for video streaming service Netflix has chilled. “People don’t like price increases, but this allows us to invest in better content”. Executives said that while gross additions were on target, there was more churn than normal, largely because of the completion of its two-year plan to increase monthly prices for subscribers.
Advertisement
“In developed markets, we believe that there are regional players who have established compelling content offerings ahead of Netflix’s launch (some at lower price points than Netflix) with fewer language barriers and more localized content”.
