Shares of Netflix fell more than 25 percent in after hours trading today after the online video juggernaut said that it added 3.02 million streaming customers during the third quarter — missing targets of 3.69 million.
Even so, the company finished the quarter with 53.1 million members and revenue of $1.22 billion.
“With an incredible variety of original series, films and exclusive licensed content arriving on Netflix in the coming quarters, we will continue to thrill our members and expand our membership,” CEO Reed Hastings and CFO David Wells wrote in a letter to shareholders today.
However, the Netflix execs also addressed the slow down in streaming customers. They wrote:
As best we can tell, the primary cause is the slightly higher prices we now have compared to a year ago. Slightly higher prices result in slightly less growth, other things being equal, and this is manifested more clearly in higher adoption markets such as the US.
In hindsight, we believe that late Q2 and early Q3 the impact of higher prices appeared to be offset for about two months by the large positive reception to Season Two of Orange is the New Black. We remain happy with the price changes and growth in revenue and will continue to improve our service, with better content, better streaming and better choosing. The effect of slightly higher prices is factored into our Q4 forecast.
Netflix dropped by $118 in after hours, trading at around $330 per share. The company boasts a market value of $26 billion. Netflix also could be hurt by reports that HBO plans to launch its own streaming service, news that was released earlier today.
Here’s a look at the company’s results.