Online DVD rental company Netflix has hit 25 million users, the company announced at its earnings call this week, but also said its earnings may fall due to its recent decision to increase prices.
Netflix split its two product offerings into DVD and streaming services, with users now having to pay more to have both products.
“The streaming-only plan continued to gain in popularity, with nearly 75% of our new subscribers signing up for it. As a result, our average subscription price reverted to a slight quarter-over-quarter decline,” the company said in a statement.
“With the rapid adoption of streaming, DVD shipments for Netflix have likely peaked.”
Netflix also said it expects users to leave in the third quarter, an announcement which caused shares to fall by 8%. However, it says growth will return to normal in the fourth quarter.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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