Netflix struggles to add new users post global expansion

For the first time in three years, Netflix has faced struggle in adding on users. The company added 160,000 subscribers in the US and 1.52 million in international markets despite targeting 500,000 in the US and 2 million abroad.Reed Hastings, CEO and founder of the company said in the Q2 earnings interview, this is not due to competition or saturation. Rather he attributed it to the price increase in services. Late last year, Netflix announced on CNN that in 2016 it would increase the price of its standard HD plan to US$10 per month from US$9 per month for new customers and US$8 a month for longer-term customers.“People don’t like price increases - we know that. It is a necessary phase for us to get through and then with the increased revenue we can invest in better content,” Hastings said. He also called the dip a “short term phenomenon” adding that the company is continuing to push for better content as it is the “fundamental driver” for the company.“I think this is really around the change resistance. Whatever the price is for something, people don’t like it going up. But in terms of new members, which really drives growth, the new pricing is going great,” Reed added. Reed also added that as the company expands throughout Asia it does expect more churn and shot term headwinds.David Wells, CFO of Netflix also added that the new emerging markets have expectation of multi-year growth.“We know we have work cut out for us and hit a point of not adding on any more markets. And we have seen in the past that some markets pick up, moderate and pick up again, and that’s what we saw this quarter,” said Wells.The company is also known for creating original content such as House of Cards and Orange is the New Black. According to Ted Sarandos, chief content officer of Netflix, increased focus in growing original content helped in making global launch easier.He added that the company is in the very early stages of its creation of international original programmes but it is happening.“We are investing in their production and culture and distributing it around the world which makes us a very important part of the entertainment landscape in those countries,” he added.“We have managed to maintain very high quality while having very high volume[…] Today a show from Netflix can be just as interesting as any other show from the networks […] When we launch our own original series there is a huge appetite for it from around the world,” Sarandos added.Watch the full interview below:https://youtu.be/MaGYP0169usIn January this year, the company announced that it would launched its service globally, simultaneously bringing its Internet TV network to more than 130 new countries around the world. The company made the announcement during a keynote by Co-founder and Chief Executive Reed Hastings at CES 2016.