The additional 2.7 million subscribers fell far short of analysts' estimates of about five million.
Netflix's new plan is aimed at battling cheaper offerings from rivals such as Amazon's Prime Video and Hotstar, a video streaming platform owned by Walt Disney's India unit. Netflix's stock plummeted 12 percent to $319.07 in afterhours trading after opening at $366.25 and reaching an intraday high of $366.50.
The stock had been up 35% for the year at the close of regular trading, almost double the gain of the S&P 500.
The company spooked investors Wednesday with a report that it lost subscribers in the United States and signed up only 2.8 million internationally in the three months ended June, roughly half its own prediction. The company expects the subscriber growth to return to more typical growth in Q3, and said it is seeing that in these early weeks of Q3.
AT&T will join the fray next year with HBO Max and NBC is expanding into video streaming, too.
Sunil Lulla, chief executive officer of Balaji Telefilms, said the company's service ALTBalaji is focused on producing exclusive content in Hindi, the country's most-used language. "We're building awesome capacity for content. Our products have never been in better shape".
Could the streaming giant Netflix be headed toward a decline? The number of Netflix subscribers in the US declined for the first quarter in almost a decade.
It has always been well understood that the growth in online streaming is primarily driven by growth in these numbers, as well as the addition of new online content. Netflix has been at the forefront of that, investing heavily at a rate faster than it is able to add these new subscribers.
Group M analyst Brian Weiser said that for now, other services shouldn't be overly concerned by a weak quarter or two at Netflix.
A $10,000 investment in Netflix at the end of 2009 would have been worth $460,000 at the end of Wednesday's regular trading session.
"There's this view that Netflix is collapsing, but it raised prices by about 20% and its subscriber count was basically unchanged", Greenfield told CNN Business. Hulu has cut prices to $6 from $8 for its main, ad-supported service. And the closer we get to D-Day, the more skittish Netflix shareholders will be. In the second quarter, it registered a negative cash flow of $594 million and expects to accumulate a negative cash flow of $3.5 billion for the entire year.
But looming in November is the launch of Disney+, seen as a formidable entrant into the streaming market, and original programming from Apple Inc (AAPL.O).
Looking ahead to Q2 in 2020, tech and media analyst Ben Keen adds: "Netflix will be holding back some key titles and marketing spend to come out fighting in the new year".
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