Netflix is showing far from satisfactory results in the United States, and it's blaming new credit card technology in the country for it.
The new cards, created to better prevent fraud and theft, are apparently causing all kinds of trouble for the TV provider. According to a letter to shareholders, the forecast for the third quarter was off because of higher-than-expected "involuntary churn".
What does that mean? The company says consumers with new credit cards have to update the numbers or expiration dates, which is why the transition has been slow. During its earnings call with investors Wednesday, Netflix said the new credit-card rollout was only a third of the way completed, which means it will be an ongoing issue.
Netflix is pretty far off from the forecasts. According to Bloomberg, Wall Street predicted domestic subscriber growth to be at 1.25 million. Instead, it hardly reached 880,000. However, when it comes to net additions to its US subscriber base, the TV provider says it’s “slightly ahead of prior year” in the nine months of 2015.
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.
According to a Business Insider report, Netflix stock plunged after market close.
Netflix actually might be onto something here, as its international subscriber growth beat estimates. It grew by 2.74 million, even though the estimates predicted 2.45 million, so something might just be wrong in the States.