San Francisco: Netflix shares plunged 11.97% in after-hours trade Wednesday after its quarterly update showed weaker-than-expected subscriber growth for the streaming television sector leader.
Netflix said it added 2.7 million new subscribers worldwide in the April-June period, well below expectations, as the sector prepared for offerings from rival groups including Walt Disney, Apple and others.
Netflix said that it still sees long-term growth on target, dismissing concerns that consumers were gravitating to rivals. Netflix, known for its original shows such as "The Crown" and "Orange is the New Black," said the latest shows did not attract as many subscribers.
That, along with hikes in the price of subscriptions in some regions, appeared to dampen growth, Hastings and other top executives said.
Subscriber growth reignited in the opening weeks of the current quarter, with the release of the latest season of blockbuster original series "Stranger Things," according to executives.
"Netflix has a difficult road ahead with looming competition and the removal of popular content, but a strong content schedule in Q3 should draw many former subscribers back in," said eMarketer forecasting analyst Eric Haggstrom.
Netflix said revenue for the recently ended quarter grew 26% from a year ago to $4.9 billion and profit fell 29% to $271 million. "Much of our domestic, and eventually global, Disney catalog, as well as 'Friends,' 'The Office,' and some other licensed content will wind down over the coming years, freeing up budget for more original content."