Netflix Inc. may have learned to take price hikes slowly after a previous debacle, but a more cautious approach has not kept the company from feeling the wrath of consumers who simply do not want to pay more for its streaming service.

Netflix NFLX, +0.95% revealed Monday that it added slightly less than 1.7 million new subscribers in the second quarter on a net basis, after projecting that membership would grow by 2.5 million. The shortfall included just 160,000 additions in the United States, the lowest quarterly total since Netflix began reporting those figures in 2012, and 1.52 million overseas, the smallest international growth since the second quarter of 2014.

With streaming services becoming more ubiquitous and an ambitious international expansion still in its infancy, Netflix’s sudden decline — just last quarter, the company added four times as many new members — seems shocking on its face, and investors sent shares tumbling more than 13% in late trading as a reaction. However, the reason is obvious and has been expected in some circles: Higher monthly subscription costs for customers are causing cancellations.

Netflix said in its previous earnings call, in mid-April, that price increases of $2 a month would begin rolling out in May, and subscribers have been receiving emails like this one explaining the change.

Netflix had previously disclosed the planned increases and been charging new customers the increased amount, but had “grandfathered” in existing subscribers, likely a nod to the Qwikster debacle that nearly took down the company amid its transition from DVDs to streaming.

Netflix said Monday that customers who learned in April that the price was about to increase had begun canceling their subscriptions, leading to unexpected “churn.” Netflix did not flat-out say in its letter to investors that the price increase led to higher churn among subscribers, however, instead saying it coincided with “press coverage” of the rate hike and that subscribers misunderstood “the news as an impending new price increase rather than the completion of two years of grandfathering.”

Netflix even used a Google Trends chart as “proof” of the increased media coverage of its subscription hike, linking from the words “press coverage” in its letter. The chart does not portray media coverage, though; Google Trends shows the number of searches for a specific term, “Netflix price increases” in this case, which spiked in interest after Netflix announced in April that prices would soon increase for existing customers.

Netflix used this Google Trends chart, which shows search interest in a topic, in an attempt to show “press coverage” of its price increase.

No matter where Netflix puts the blame, it seems obvious that increased subscription prices are leading to larger-than-expected cancellations. Netflix said that it experienced the same issue with churn in established international outposts, like Canada, as in the U.S.

Chief Executive Reed Hastings was much more blunt about the effects of Netflix’s price increases in Monday’s conference call.

“People don’t like price increases, we know that,” Hastings said. “It’s a necessary thing for us to get through.”

Hastings is right that Netflix price increases are a necessity. The company had been charging a base price of $7.99 a month since originally severing the streaming service from the DVD-by-mail business in 2011, and has been spending money wildly in the interim to offer more original content for viewers. Since then, Hulu has launched an ad-free service for $11.99 and Time Warner Inc.’s US:TWX HBO has introduced a streaming-only option for $14.99 a month, indicating that consumers will spend more than what Netflix was charging existing customers.

To keep viewers hooked in the U.S. and attract subscribers in the dozens of countries that received access to the service this year, Netflix must keep spending, but it can’t continue to run the business at a huge deficit. Netflix reiterated Monday that it expects to be break-even on net income this year and begin to produce material profit in 2017, which can’t happen without the price increase.

Netflix made the right call in deciding to raise its subscription prices, and made up for its sudden price hike of 2011 by approaching the increase gradually. Now, the company must swallow the short-term pain of slackened subscriber growth if it wants to follow a long-term path to international dominance in streaming video.