Netflix shares plunge as subscriber growth falls

Netflix's new subscribers worldwide fell below expectations in the third quarter

US shares of Netflix, the world's largest video streaming service, plunged on Wednesday after it reported fewer subscribers than forecast.

Netflix signed up 3.02m customers globally in the third quarter, compared to the 3.69m it had expected in July.

News of the slow growth, mainly in its US market, sent its shares plummeting as much as 27% on the Nasdaq index.

The company blamed a $1(£0.62) price rise to $8.99 for its monthly service fee for fewer new subscribers.

Its stock lost more than $117 to $331 in after-hours trading from its close of $448.59.

Netflix operates in nearly 50 countries, but the US is its biggest market. Its growth in customers there fell 24% in the third quarter from a year ago to 980,000.

The company's slowing growth figures came on the same day as rival Time Warner's HBO announced that it will launch an online streaming service in the US starting next year.

Netflix shrugged off concerns of competition intensifying from HBO saying that there is enough room in the market for customers to use both services.

"It is likely we both prosper as consumers move to Internet TV," Netflix said in a statement.

The online streaming giant has invested in several new original shows and more recently original movies like the sequel to Oscar-winning martial-arts film "Crouching Tiger, Hidden Dragon" in an effort to maintain its position.