Netflix membership growth is slowing, but streaming is here to stay, experts say

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Experts remain optimistic about Netflix for the long term despite the short-term chill.

The streaming giant's shares plunged 14 percent Tuesday after it surprised Wall Street on Monday by reporting slower-than-expected subscriber growth for the second quarter. Netflix only added 160,000 memberships domestically and 1.52 million internationally, well below its April forecast that it would add 500,000 members in the U.S. and 2 million overseas.

Mark Mahaney, lead internet analyst at RBC Capital Markets, told CNBC's "Squawk on the Street" on Tuesday that he was surprised by the miss. Netflix said longtime members were canceling the service after seeing their subscription prices rise by a few dollars. These longer-tenured users had been temporarily grandfathered into a lower-priced plan.

Laura Martin, internet and media analyst at Needham & Co., told "Squawk on the Street" that she sees things getting worse for the company in the third quarter. Martin pointed out that Netflix expects "un-grandfathering" to continue through this quarter and that the company also projects fewer new subscriptions during the Olympics.

While there are reasons to be concerned, Mahaney said he nevertheless believes internet streaming is "still Netflix's market," a view held by many analysts bullish on the stock.

"The market is clearly moving towards more internet video and this company has eight times as many subscribers as the next closest service and nobody is out there with a lower price point than Netflix has at least at the low end," Mahaney said.

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Angel investor Jason Calacanis agreed and told "Squawk Alley" that while "there's a lot of headwinds for Netflix on the pricing front," he looks at other measures, like how "bingeable" is the original content, to determine how the business is doing. Calacanis said if Netflix can continue producing "amazing content" over the long term, then "the sky is the limit for Netflix" and Tuesday's price action is a buying opportunity.

"What I like about what Netflix is doing about raising the prices is that it gives them more money to spend on content and it builds this huge archive of content," Calacanis said Tuesday. He added that he has "huge faith in CEO Reed Hastings and his team."

Phil Libin, founder of Evernote, told "Squawk Alley" that the reason why he's still optimistic about Netflix's future is the degree to which the company has made its product a part of people's lives.

"I really like companies that have ingrained themselves into the fabric of people's daily lives and I think Netflix has done that more than most other companies," said Libin, who is now managing director at General Catalyst.