Netflix has lowered its expectations for the number of U.S. subscribers it will have in the third quarter by four percent. According to All Things D, the company has knocked its projection down to 24 million from the previous outlook of 25 million.
Netflix kicked in a rate increase for U.S. subscribers at the beginning of the month. Announced in July, the new plan separates pricing for Netflix’s streaming and DVD plans. Streaming-only now costs $7.99 a month, one DVD at a time also costs $7.99 a month, and both cost $15.98 a month, up from the monthly rate of $9.99.
Though Netflix is expecting to lose some subscribers, it doesn’t think it will lose revenue, All Things D said. In fact, when it announced the price bump it said it expected to see in increase in third quarter profits.
Netflix has taken a couple of hits recently. On the same day the price hike went into effect, Starz Entertainment ended its contract with Netflix, announcing that it will remove its content from the Watch Instantly library as of Feb. 28. Netflix tried to downplay losing Starz, saying its content only accounts for 8 percent of viewing in the U.S. It also pledged to use the money that was going towards the deal with Starz to secure other licensing deals.
On top of that, several months ago, Sony pulled hit movies like Salt and The Social Network from Netflix because of issues with the contract between Sony and Starz. Netflix never offered any explanation as to why the movies were removed.
All Things D pointed out that earlier this summer, Netflix’s shares were floating around $300, but by yesterday they had fallen to $208.