Netflix experienced a slower rate of subscriber take-ups in the last three months than in the previous quarters, with the global streaming device blaming the rise in prices for its slow-down in growth.
The company added 2.7 million new subscribers globally during the April to June period, falling way below the expected 5 million, causing shares to fall by 10%.
The company stated that “Our missed forecast was across all regions, but slightly more so in regions with price increases.”
Figures also showed that the company lost around 120,000 net customers in the United States during the same three months, with this being the first time it lost customers in its United States market in eight years.
This slow-down in growth also comes as a result of there being increased competition from rivals such as Walt Disney with its Disney Plus service and Apple with its Apple TV+ service.
However, Netflix themselves feel confident that the slow-down was not brought about by competition in the market, with the company saying in a statement that “We don’t believe competition was a factor since there wasn’t a material change in the competitive landscape during [the second quarter] and competitive intensity and our penetration is varied across regions.”
Netflix also admitted it performed worse in countries where it had raised its prices in order to help fund more original content, with the company being set to lose some of its favourite shows to rivals, with such shows including The Office and Friends.
Netflix also added that it expects growth to return back to normal during the third quarter of 2019, and they also claim that they “are seeing that in these early weeks of Q3.”
The global streaming service also argued that whilst it will be losing some of its most popular shows to competitors, it will be combatting the potential decline in customers with new original content. In the statement, the company added that “Much of our domestic, and eventually global, Disney catalogue, as well as Friends, The Office, and some other licensed content will wind down over the coming years, freeing up budget for more original content.”
The company remains optimistic even though it experienced its worst quarterly subscriber take-up in a long time, with such optimism mainly coming as a result of the great popularity of shows like Stranger Things, which attracted a record-breaking viewership during the launch of its third season on 4 July, with over 40.7 million accounts tuning in to watch the sci-fi infused show.
Netflix’s CEO, Reed Hastings, stated that he thinks that the company is in a good position, making the claim that the “product has never been in better shape.”