While the service is expected to add 2.5 million subscribers this year, it now predicts a loss of 2 million subscribers.
Netflix's stock tumbled 26% and lost $40 billion of its stock market value.
Netflix is now contemplating cutting subscription pricing and offering lower-priced service.
The company’s move to cut down on subscribers sharing accounts with people outside their homes may be one of the factors.
Netflix tried to make money from people sharing accounts. Subscribers had to pay more to add other households.
Another factor for Netflix is intense competition from titans such as Apple and Disney.