Netflix is blaming its low performance in US subscriptions on the transition to chip-based credit and debit cards.
In a letter to shareholders, Netflix said its forecast for the third quarter was off due to higher-than-expected “involuntary churn” because of the transition in the US from one type of credit card technology to another.
Basically, people didn’t update their credit cards on Netflix, and let their accounts expire.
Netflix says that in terms of net additions to its US subscriber base, through the first nine months of 2015, it is “slightly ahead of prior year.” Netflix expects to finish 2015 at around the same level as 2014.
“This would mark the 4th consecutive year we’ve added about 6 million members in the US,” the letter says. Netflix stock plunged after market close.