Netflix has released their earnings report which wasn't what people were expecting or what they forecasted and have seen a huge drop in their stock price. Netflix still added about 3 million subscribers, but after forecasting 3.7 million and in comparison to last year those numbers didn't give investors a warm and fuzzy feeling. Netflix is blaming a $1 price increase on one of the major reasons for the slowdown as it appears that even a $1 increase is enough to scare away streaming customers who at the moment have a lot of different choices. Slate has the full story.
Netflix tacked on about 3 million new users across the globe over the past three months, undershooting its forecast of 3.7 million. But perhaps more worrisome, it’s growth in the U.S. fell year over year, reaching just 1 million net new sign-ups, down from 1.3 million in the third quarter of 2013. The company is blaming its $1 price hike in May, which raised the cost of a subscription to $8.99 per month. “As best we can tell, the primary cause is the slightly higher prices we now have compared to a year ago," management said in its letter to shareholders. "Slightly higher prices result in slightly less growth, other things being equal, and this is manifested more clearly in higher adoption markets such as the US.”