Netflix Lost 123,000 U.S. Subscribers After Price Hike
It's also facing new competition in the video streaming space later this year from Disney and Apple.
In the second quarter, Netflix lost 123,000 U.S. subscribers, which totaled at 60.1 million. The company's international subscriber count also failed to reach Netflix's forecasts, going up by only 2.8 million, as opposed to the projected 5 million. In total, the company's subscriber count reached 151 million.
"Our missed forecast was across all regions, but slightly more so in regions with price increases," Netflix said in its shareholder letter.
In January and in the following months, Netflix began raising the price for its different subscription packages. The standard plan -- the company's most popular offering, which offers HD quality -- went up from $11 per month to $13. The basic plan, on the other hand, increased from $8 to $9.
"The drop in U.S. subscribers suggests that viewers on lower pricing tiers dropped Netflix as a result of the price increase," eMarketer analyst Eric Haggstrom said in an email.
Despite the down numbers, Netflix is optimistic subscriber growth will pick up and result in the addition of 7 million new subscribers in the third quarter. Earlier this month, the company's hit show Stranger Things season 3 premiered, which broke viewership records on the service.
However, Netflix is about to face a wave of competition in the video streaming space. Perhaps, the biggest looming threat is Disney+, which will launch in November for the low price of $6.99 a month. Apple, WarnerMedia and NBCUniversal are preparing their own services too.
Not helping the matter is how Netflix is losing the rights to its most popular licensed TV shows, including The Office and Friends, to the rival streaming services. But despite the competition, Netflix is confident it can continue to grow and attract new viewers.
"In the U.S., our most developed market, we still only earn about 10 percent of consumers' television time, and less of their mobile screen time, so we have much room for growth," the company said in the shareholder letter.
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