The Sell-Off Continues as Netflix Loses Subscribers, Content

Netflix (NASDAQ:NFLX) shares are down another 5% today after tumbling Thursday on news that the controversial 60% price hike on one of its most popular plans might cost the streaming-video service 1 million subscribers.

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The company cut its subscriber estimates for the third quarter yesterday to 24 million in the U.S., having forecast two months ago that it would end the quarter with 25 million subscribers.

Since Netflix announced its price hike in mid-July, its shares have declined more than 40%. Trading at around $160 today, Netflix shares are down more than 8% for the year, though still up 300% in the past two years.

While some analysts remained bullish even after the price hike, the price of acquiring content has risen ten-fold in the past three years, and many of the service’s current contracts are set to expire this year or next. Netflix has not been able to negotiate new deals with all of its content providers, as it faces increasing competition from services like Hulu (NASDAQ:CMCSA) and Amazon on Demand (NASDAQ:AMZN).

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Earlier this month, Starz Entertainment ended its deal to provide movies to Netflix, cutting off one of the online video service’s most valuable sources of recently released movies. Starz said that the $300 million Netflix would have spent to maintain access to Starz and its rights to Sony (NYSE:SNE) and Disney (NYSE:DIS) features wasn’t enough to offset the incurred loss in subscriptions to the pay-TV channel posed by competition from Netflix.