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Netflix shares plummet on Q2 result

NZN 18/07/2016 Peter Mitchell

Netflix, just like characters in one of its many horror movies, has had a harrowing day.

The US-based streaming video provider announced on Monday it added significantly lower subscribers between April and June than what it, and Wall Street analysts, had expected.

Netflix, which has a strong foothold in Australia and New Zealand, suffered a 15 per cent drop in its shares in the US after the disappointing second-quarter numbers were released.

Netflix founder and chief executive Reed Hastings pointed to press coverage of the company's $US2 ($NZ2.80) price rise in the US to explain the company's failure to meet its forecast of gaining 2.5 million new members in the period.

Netflix grew by 1.7 million members in the second quarter, well below the 3.3 million additions in the same period last year.

"People don't like price increases," Hastings told a conference call.

"We know that.

"It is a necessary phase for us to get through.

"With the increased revenue we continue to invest in better content so that's what makes us feel strong and positive about the long term and this is a short term phenomenon."

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