Netflix facing tougher times as subscriber growth slows

SAN FRANCISCO — Netflix is running into trouble as the internet video service wrestles with slowing U.S. subscriber growth and an ambitious international expansion amid stiffening competition.

The challenge came into sharper focus Monday with the release of Netflix's second-quarter earnings.

Netflix only added 160,000 U.S. subscribers from April through June. That's the lowest U.S. customer gain that the company has posted during that three-month period since splitting up its video-streaming and DVD-by-mail services five years ago.

Management blamed the disappointing performance on cancellations by subscribers facing price increases of as much as $2 per month with the expiration of a two-year rate freeze.

Netflix fared better outside the U.S., but its second-quarter gain of 1.5 million international subscribers missed management's projections.

The company's stock plunged 15 percent to $84 in extended trading.

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