We knew a Netflix price hike was coming—you can thank the service’s aggressive lineup of original content—and now we know what kind of impact it’s having on the service. CEO Reed Hastings on Monday revealed Netflix’s Q2 2016 earnings, saying there was significantly slowed subscription growth compared to last year; the company set a 2.5 million customer target but only saw 1.7 million new subscribers, 160,000 of which were in the U.S. The news sent Netflix’s stock plummeting by 15 percent in after-hours trading.
Earlier this year, Netflix said it would raise the price of its $7.99 plans to $9.99, a significant jump when you add it all up over a few years. But, hey, if you want access to shows such as Stranger Things, Jessica Jones, and Daredevil, you have to pay the price. Hastings said the poor reception from subscribers isn’t unusual, and the service is doing what it can to make the transition as painless as possible.
Hastings tried to add a bit of optimism to the slowed growth. “This is really around change resistance,” Hastings said during Netflix’s earnings call. “Whatever the price is for something, people don’t like for it to go up. But in terms of new members, which is what drives growth, the new pricing is working great.”
Netflix has grown rapidly over the past several months and now serves 190 countries around the world. Along with its expansion, the service has invested heavily in original content, with shows such as Luke Cage slated for a release later this year. Recently shows such as Unbreakable Kimmy Schmidt earned Emmy nominations, proving that Netflix’s original content is some of the best in the business.
Now, it’s just a matter of convincing people to pay up for the $10/month price.