Netflix's video streaming service suffered a dramatic slowdown in growth during its traditionally sluggish spring season, a drop-off coming as the company boosts its prices and girds for even stiffer competition. The service picked up 2.7 million worldwide subscribers for the April-June period. That's far below Netflix's forecast of 5 million subscribers. The second-quarter letdown announced Wednesday comes after Netflix attracted nearly 10 million subscribers during the first three months of the year, more than any other quarter since the debut of its video streaming service 12 years ago. The slowdown rattled investors already wondering how Netflix might fare against a new wave of competition coming this fall when both Walt Disney Co. and Apple plan to launch their own video streaming services, the AP reports.
Netflix traced the second-quarter's slow subscriber growth primarily to a recent round of price increases, including hikes of 13% to 18% in its biggest market, the US. Some American households decided Netflix is no longer worth it at the higher price, causing the company to end June with 120,000 fewer subscribers in the country than it had at the end of March. After the second-quarter numbers came out, Netflix's stock plunged 12% in extending trading. If that sell-off is replicated in Thursday's regular trading session, it will be the largest decline in Netflix's stock price in three years and wipe out $18 billion in shareholder wealth. The company predicts it will add 7 million subscribers worldwide from July through September, but the battle for viewers' attention and dollars is about to get much tougher. Besides Disney and Apple, AT&T will join the fray next year with HBO Max; NBC is expanding into video streaming, too.
(Read more Netflix