Netflix released its Q2 2016 earnings yesterday and one of the biggest takeaways from the report was how many subscribers the company has lost — and how few new subscribers have signed up — following the streaming service’s decision to increase subscription prices.
Netflix’s CEO, Reed Hastings, said in a letter to investors that they attribute the lack of growth to the price hike, adding that it wasn’t too unusual to see a change in growth following a disruption in service. Netflix only added 160,000 thousand new subscribers in its second quarter, coming in far under the 900,000 subscribers that the company saw during its second quarter last year. Earlier this year, Hastings confirmed that basic plans would see a $2 monthly increase from $7.99 to $9.99.
In the letter to investors, Hastings said that some customers may have felt wary about the price increase following confusing reports in the media. They added that while they were still growing, it was at a much slower pace than it has been previously and they’re doing everything they can to make the transition as beneficial to their subscriber base as they possibly can.
Following Netflix’s report, shares in the company dropped nearly 15 percent, despite the company pulling in $2.1 billion in revenue during the three month period. That’s a substantial increase from the $1.64 billion that the company amassed during the same period last year, but the lack of growth in the company shows that investors are worried Netflix may have hit its peak.
The streaming service has been investing more of its time and energy into producing new original series, like the most recent Stranger Things, and securing top talent for those series. More is expected to be announced about the company’s future at the Television Critics Association conference at the end of this month.