Despite this, Netflix added 5.1 million households over the three-month period - giving it 130 million subscribers overall with 57.4 million in the U.S. and nine million in the UK.
United States net adds of 0.7m (vs. guidance of 1.2m) were down vs. last year's Q2-record 1.1m, but consistent with previous Q2 performance (0.5m in Q2'12, 0.6m in Q2'13, 0.6m in Q2'14, 0.9m in Q2'15, and 0.2m in Q2'16).
The company has forecast a slower rate of household subscription growth during the current quarter.
Bringing in more subscribers and money is vital for Netflix because it expects to keep spending more on exclusive TV shows and movies to try to stand out from rivals. Following the announcement, the stock was down about 14% at $346.00 in Monday's after-hours session. Revenue was up 6 percent to $3.9 billion. The company expected to hit 5.11 million subscribers globally and 1.23 million subscribers domestically, but it actually hit 4.5 million and 700,000, respectively.
"We had a strong but not stellar Q2", Netflix said in a quarterly letter to shareholders.
But Netflix missed its target badly in the April-June period, causing its high-flying stock to plummet by about 14pc to $345.63 (€294.63) in extended trading. Its total base of 57 million subscribers in the USA dwarfs Hulu's 20 million users and HBO's 5 million.
The company will spend as much as $8bn on programming this year.
They're also anxious about the amount of cash Netflix might spend this year - up to $4 billion by J.P. Morgan estimates - and the pace of subscriber growth. It also fell short on total revenue.
"Netflix is in a business that varies by quarter anyway and perhaps the company shouldn't have gotten too enamored with the insane success of the last two quarters, which was invigorating but not sustainable", Forrester analyst James McQuivey said. It seemed those dollars were paying off, when the platform received 112 Emmy nominations for its own content, breaking HBO's 17-year streak of dominating the categories.
He added the expectation that despite the weaker-than-expected results, the company was expected to continue to be the leading video streaming service across the US.
"Right now, Netflix is still miles ahead of its closest competitor, but there is going to be a giant bulls-eye on Netflix's back during the next 18 to 24 months", Ives predicted in an interview.