Netflix reported a loss of 800,000 subscribers, which lowered its customer base to a total of 23.8 million U.S. subscribers, while Netflix managers and analysts expected the company will lose some 600,000 customers in the United States. The company stock fall 35 percent on the news with market analysts predicting Netflix will witness even more massive loss of customers across the U.S.
In July, the company had split its streaming and DVD rental services and increased prices by as much as 60 percent, which provoked dissatisfaction among customers and markedly lowered its customer base within months.
In June, the company shares were traded at $300 per share while on Tuesday Netflix stocks decreased to $41.34 per share, which is the second lowest level in the company history. Later, Reed Hasting, Netflix CEO, went on to say that the company’s core business model is working while the company forecasts show its domestic streaming subscribers will gradually decrease to about 20 to 21.5 million in end-December.
Market analysts expected Netflix to post profit of $1.10 per share on sales of $919 million in the fourth quarter of 2011, compared to profit of $0.87 per share on sales of $595.9 million in the same period of 2010. However, the company forecasts it will post fourth-quarter profit per share of $0.36 to $0.70 per share on sales worth $19 to $37 million.