Netflix's US Subscriber Count Falls After Price Hike

Noah Schnapp attends the

Netflix said on Wednesday that it lost U.S. streaming customers for the first time in eight years and missed targets for new subscribers overseas, an announcement that jarred investors ahead of looming competition. Netflix added 2.7 million customers worldwide for the three months ending in June, well short of the 5 million expected by investors and down from the 5.5. million it had brought aboard in the first quarter.

Netflix shares sank almost 12 percent in after-hours trading after the quarterly results announcement and subscriber numbers data.

"This is negative, and I think we're going to look back at this quarter as one of the pivotal moments in the Netflix story", Munster told CNBC. Subscription prices are something that the Indian market is very price sensitive about. This is still one of the untapped markets for the streaming service, because there is a lot of scope for growth.

And that is where India gains even more importance for Netflix.

"They raised prices in the U.S. by an average of $2 per month, and most subscribers learned about their increase during Q2", said Wedbush Securities analyst Michael Pachter.

Netflix has gotten plenty of attention in recent years for its major outlays of cash for content and its steady stream of sometimes award-winning, sometimes totally bad original movies and shows.

While competition is set to heat up with the upcoming launches of Apple Inc's (AAPL.O) Apple TV and Disney+, several analysts said Netflix's global reach is likely to give it an edge.

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"From what we've seen in the past when we drop strong catalogue content, our members shift over to enjoying our other great content".

The Basic Plan for Netflix is certainly cheap, but with competitors like Disney Plus undercutting it on price, and high-profile shows like Friends leaving the service, it makes sense to offer a bargain price for those willing to use Netflix in a more restricted fashion.

As far as competition goes, Netflix's letter to investors made a point of referencing the increasingly crowded landscape of streaming entities.

Netflix said that it has no plans to add advertising to its streaming television service. But despite its challenges the company remains steadfast on staying "advertising free". Also during Q2, Netflix launched When They See Us, a limited series based on the real-world Central Park Five case.

A "Stranger Things 3" video game tailored for PlayStation, Switch, and Xbox consoles as well as personal computers was released on July 4 as a download priced at $19.99.

A new "Stranger Things" role-playing puzzle game for mobile devices will be released next year.

Netflix said on Wednesday it would roll out a lower-priced mobile-only plan in India, tapping into a price-sensitive market where data consumption on smartphones is surging.

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