By Jonathan Davies

Netflix has seen its shares fall sharply after it gained fewer subscribers than expected in the third quarter.

The world's largest video streaming service gained 3.02m customers in the third quarter. But it had forecast 3.69m.

That resulted in the share price dropping by 25%. The price per share had been $448.59, but it lost $117 to $331.

Netflix said the $1 increase in monthly subscription fee was to blame. There was a particular drop in growth of new customers in the US, its biggest market. The increase of customers fell by 24% to 980,000.

The figures came on the same day that HBO announced that it will launch a rival online streaming service in the US.

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

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