Netflix's U.S. growth slows, shares plunge
By Lisa Richwine
(Reuters) - Netflix Inc signed up fewer video streaming subscribers than forecast for the quarter that ended in September as its U.S. growth slowed markedly, sending its shares plunging as much as 27 percent.
The company blamed a $1 price hike to $8.99 a month for discouraging new sign-ups. It lured 3.02 million new streaming customers globally, versus the 3.69 million it projected in July.
Netflix attracted about 980,000 new customers in the United States, its largest market, down from 1.29 million in the same period a year earlier.
The news came after Time Warner Inc's HBO said on Wednesday it will offer new competition next year with a streaming service that does not require a pay TV subscription.
"Year-on-year net additions in the U.S. were down," Netflix said in a quarterly letter to shareholders. "As best we can tell, the primary cause is the slightly higher prices we now have compared to a year ago."
Shares of Netflix fell 25 percent to $333.53 in after-hours trading, from their $448.59 close on Nasdaq.
Netflix, waving off fears that a standalone HBO would draw users away, argued that many will subscribe to both services because they offer different shows.
"It is likely we both prosper as consumers move to Internet TV," the company's letter said. Continued...