SAN FRANCISCO (AP) — Netflix's video streaming service suffered a dramatic slowdown in growth during its traditionally sluggish spring season, a drop-off coming as it girds for even stiffer competition.
The service picked up 2.7 million worldwide subscribers for the April-June period. That's far below the 5 million subscribers forecast by Netflix. The second-quarter letdown announced Wednesday comes after Netflix attracted nearly 10 million subscribers during the first three months of the year , more than any other quarter since the debut of its video streaming service 12 years ago.
Netflix ended June with 151.6 million worldwide subscribers, far more than a current crop of video streaming rivals that includes as Amazon and Hulu.
Signaling it expects to regain some momentum this summer, the company projected it will add 7 million subscribers from July through September. The optimism stems in part from the immense popularity of "Stranger Things," whose third season attracted record viewership after its July 4 release.
But the battle for viewers' attention and dollars will get tougher this fall when Walt Disney Co. and Apple plan to launch their own streaming channels.
AT&T will join the fray next year with HBO Max and NBC is expanding into video streaming, too.
"The competition for winning consumers' relaxation time is fierce for all companies and great for consumers," Netflix said in a letter to shareholders.
But Netflix traced the second-quarter's slow subscriber growth primarily to a recent round of prices increase, including hikes of 13% to 18% in its biggest market, in the U.S. That pushed the price of its most popular U.S. plan to $13 per month, testing the bounds of how much some consumers are willing to pay for a service that started out at $8 per month for the same level of service.
The increasingly crowded field vying for viewers' attention and money is raising questions about whether Netflix will be able to maintain the rapid rate of subscriber growth that has made its stock as one of Wall Street's premier performers during the past decade.
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.
But in a sign of how quickly some of those gains can evaporate if Netflix starts to struggle for subscribers, the company's stock plunged 10% in Wednesday's extended trading to $325.