Netflix shares have tumbled more than 10 per cent after the DVD and online video streaming service’s warning that a recent price rise would cause some customers to downgrade or cancel subscriptions.
The company, which was reporting second-quarter results, also warned that revenues would “only grow slightly on a sequential basis” following the price change, which separates DVD and streaming into different subscription packages.
Netflix said it had increased the number of paying global subscribers to 25.6 million, a 70 per cent rise on the same period last year.
In his quarterly letter to shareholders, Reed Hastings, chief executive, also ruled Netflix out of the bidding for Hulu.
“We aren’t planning to bid on Hulu because most of its revenue is from providing free ad-supported streaming of current-season TV shows, which is not our focus,” wrote Hastings.