The company ended June with 8.4 million subscribers, and probably would have had even more if it had advertised its service as vigorously as it usually does.
CEO Reed Hastings says Netflix decided to sacrifice some of its growth opportunities to keeps Wall Street happy with higher profits.
Netflix could afford to spend less on advertising because its biggest rival, Blockbuster, has been promoting its online rental service less aggressively during the past six months.
Some analysts believe that could change now that Blockbuster has abandoned a takeover bid for electronics retailer Circuit City and is preparing to expand its Internet presence with a pay-per-view online video service acquired last year from Movielink.
At midday, Netflix shares were up more than 2 percent.
