Netflix announced it expects slower growth in subscriptions Monday, causing its shares to drop 9 percent, The Wall Street Journal's Joan E. Solsman reports. Netflix said it was getting more expensive to win new customers, plus the number of people cancelling their subscriptions inched upward. Though the company added 1.8 million customers in the second quarter, it expects to add 700,00 subscribers in the third quarter, ending in September.
The news comes not long after Netflix outraged many customers by no longer allowing streaming video and DVD rentals for $9.99 a month; under its new pricing subscribers now have to pay $7.99 a month for each of those services. After interviewing 500 Netflix customers, TDG estimates between 12 percent and 15 percent of subscribers who get both streaming and DVD rentals will cancel their subscriptions within the next six months because of the change in price.