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Netflix Share prices drop after missed Targets

The streaming Balloon may have popped, or at least been deflated, as market leader Netflix has seen a share price drop of more than 25% after the company failed to meet its subscription target in the last quarter.

Originally Netflix forecast that they would get 3.69 Million new signups in the last quarter, but the company only managed 3 million new streamers between July and September, which in itself is far from a failure.

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The Guardian reports that the company’s revenue for the last three months was $1.22 billion (£763m), which was also down on forecasts, and in a letter to shareholders, Netflix said: “We remain happy with the price changes and growth in revenue and will continue to improve our service. The effect of slightly higher prices is factored into our Q4 forecast.”

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The company did point out that the impact of the drop “appeared to be offset for about two months by the large positive reception to season two of Orange Is the New Black”, which debuted in June, and this year Netflix has raised its pricing in several territories to compensate the changes.

What’s more, in light of the dropping in Netflix’s users, HBO in the US has come out and announced plans to offer viewers an online service in 2015.

This means an increased competition for Netflix, and the possibility of losing some of its shows.

However if HBO’s service were to take off, other rival Amazon Prime instant video would suffer more with its current links to HBO.

However, whilst a drop in share is a big deal for Netflix, singing up 3 million new customers in 3 months is still a big turnover of people streaming content.