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  • 07.18.16

Is Netflix’s price hike to blame for its lackluster Q2 earnings results?

More than seven months after announcing a huge international expansion, Netflix expected to see a big bump in its subscriber base. But instead of the 2.5 million new subscribers projected for the second quarter, Netflix only saw a net total of 1.7 million. 

In its letter to shareholders, Netflix partly blamed this on the price increase experienced by existing members who were “grandfathered” into its old rate of $7.99 per month—people who are now being charged $9.99 per month—as well as consumer misconceptions and “associated media coverage.” Sure! But what Netflix refers to as “our plan to un­-grandfather longer tenured members” is clearly a price hike. JPT