It appears that Netflix is having some growth issues.
"We are growing, but not as fast as we would like or have been," Netflix CEO Reed Hastings wrote in his quarterly investor letter.
The streaming giant's stock tanked as much as 15 percent just before it released its second quarter earnings report on Monday, and the main culprit behind the plunge? Slower-than-expected (or wanted) subscriber growth.
Netflix expected to add 2.5 million new users, but only managed to add 1.7 million.
2 of 3The problem, as Hastings explained, wasn't simply that they didn't add enough new users at home and abroad, it was also that the company lost subscribers when media reports came out about a price hike.
"Churn ticked up slightly and unexpectedly, coincident with the press coverage in early April," Hastings said, referring to the pricing news. When the new pricing kicks in, the most popular plan will go up a dollar to $9.99 a month.
Netflix justifies the price increases given all the new original content it is creating like "Chef's Table" and "Orange is the New Black," but it turns out users aren't eager to fork out more money.