Netflix’s stock price is down around 14% after the company released second quarter membership figures that are significantly lower than forcasts predicted. Netflix’s subscriber base grew by 1.7 million last quarter, of which only 160 thousand came from the US. The company expected growth in the last quarter to be 2.5 million members globally. Netflix says there was an unexpected increase in existing customers that left the service, resulting in the lower than expected growth. They attribute the customer departer to the end of a 2-year grandfather period which resulted in a price increase from $7.99 to $9.99 for members who signed up before the May 2014 price increase. Another grandfather pricing period will be ending later this year in October when those paying $8.99 will see their monthly rate increase to $9.99 as well. I wouldn’t be surprised if Netflix’s recent crackdown on proxy/VPN users was also a big contributor to the influx of existing membership cancelations.
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