Netflix, the streaming video provider that angered its subscribers with a significant rate hike that took effect this month, has lowered its guidance for the third quarter.
Netflix lowered its expectations from 25 million subscribers to 24 million subscribers, reflecting a loss of customers from the second quarter when the company had 24.59 million domestic subscribers.
Netflix's 3Q forecast would represent the company's first loss in subscribers since the second quarter of 2007 when it lost 55,000 subscribers, according to Business Insider.
The Los Gatos, Calif.-based company expects 21.8 million domestic streaming video subscribers, down slightly from a previous forecast of 22 million.
Netflix anticipates serving 9.8 million streaming-only subscribers, 2.2 million DVD-only customers and 12 million subscribers to both services. On July 25, Netflix had higher expectations for the third quarter, including 10 million streaming-only subscribers and 3 million DVD-only customers.
Netflix’s previous forecast (12 million) for U.S. customers who subscribe to both services hasn’t changed, and the company said its financial guidance remains the same.
In a letter Thursday to shareholders, Netflix executives defended the company’s decision to separate its unlimited streaming and unlimited DVD plans in the United States, which resulted in a 60 percent hike from $9.99 to $15.98 for customers who subscribed to both services.
Netflix CEO Reed Hastings and CFO David Wells said the company’s splitting of services had four purposes, including enabling the company to improve its global streaming service more rapidly and allowing it through revenue growth to license more streaming content.
“We know our decision to split our services has upset many of our subscribers, which we don’t take lightly," Hastings and Wells wrote, “but we believe this split will help us make our services better for subscribers and shareholders for years to come."
