INSUBCONTINENT EXCLUSIVE:
Netflix, the streaming juggernaut that has upended the entertainment industry, showed signs of vulnerability Wednesday when it significantly
undershot the number of customers it had expected to sign up for the second quarter.
The company said it had added 2.7 million subscribers
worldwide for the three months ending in June, well short of the 5 million that investors were expecting.
It also said it had lost 126,000
paid subscribers in the United States during the period, the first time it has shed domestic customers since it started putting out original
At the start of the quarter, Netflix announced that it was raising prices by anywhere from 13% to 18%, depending on the subscription plan
In its statement on its second-quarter earnings, the company acknowledged that the higher rates had something to do with its failure to meet
expectations.
Netflix decided to charge more at least partly because it burns a lot of cash, much of it borrowed, and spends wildly on
It said it now expected to add more than 7 million customers during the summer months, slightly up from its previous estimate.