Netflix reported a record $822 million in revenue for the third quarter, but the company's Q3 earnings report was hardly a success, as it also reported losing 800,000 subscribers.
Naturally, the loss in subscribers led to the company's stock taking a hit. The stock was down nearly 35% in pre-market trading.
Wondering why the company lost so many subscribers? I would say a couple of good guesses would be the controversial pricing changes and the whole Qwikster ordeal. The company's deal with Starz falling apart probably didn't help much either, considering that was a source of a significant portion of Netflix's newer movie offerings.
There's also just a rise in competition. The recently launched Blockbuster Movie Pass probably isn't going to do much to help Netflix either.
Netflix did just announce a UK streaming service, however. They're also looking to get more into exclusive content. And being available across more devices should certainly help. Last week, Netflix launched a new Android app for Honeycomb tablets.
The jury is still out, however, on if Netflix will continue to be able to thrive in the face of increasing competition. For more on that, read this.
The company expects to continue to lose subscribers. It expects by the end of the year to have between 20 million to 21.5 million streaming customers and 11.3 million DVD subscribers (U.S.), compared to the current 21.5 million and 14 million respectively.
Audio is available of the company's earrings Q&A session here.