Netflix said the increases were one reason why the company will add just 300,000 USA subscribers in the three months to September – far fewer than the 880,000 added in the same period a year ago.
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Netflix shares plummeted yesterday after the United States streamer revealed it had added only 1.7 million members worldwide in the second quarter of 2016.
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 worldwide markets.
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.
‘Disrupting a big market can be bumpy, but the opportunity ahead is as big as ever and we continue to improve every aspect of our business’. In the third-quarter, the video streaming firm expects to add slightly more than 300,000 USA subscribers. The second quarter accounted for $2.1 billion in revenue, and $70 million in operating income.
The second quarter has traditionally been weak for Netflix, but growth seems to have gotten worse over the past three months due to the company’s price increases for long-time customers.
On Monday July 18, Netflix (NFLX) will release its second quarter earnings results.
“Unfortunately, this year the regulatory climate in China for our service has become more challenging”, said the company in its letter to shareholders.
The online video streaming giant Netflix Inc.
Furthermore, the streaming company anticipates to witness a slowdown when it comes to subscriber growth around the Summer Olympics, just like what it experienced 4 years ago. Analysts expected the revenue to rise 28.4% to $2.11 billion. While they’re still moving in the right direction, subscriber numbers are falling short of expectations, and there may be a simple reason why: people don’t like higher prices. These improvements have enticed subscribers to join the service; Netflix gained 13 million new subscribers in 2014, and another 17 million in 2015.
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However, analysts also pointed to increasing competition from the likes of Amazon Instant Video, Now TV, Hulu and YouTube Red, which now fall into the same price bracket as Netflix.
