Netflix Blames Subpar Growth on Switch to Chip Credit Cards

October 20, 2015, Written By John H. Oldshue
Simferopol Russia - June 22 2014: Netflix American company a provider of films and TV series based on streaming media. The company was founded in 1997.

Netflix offered a unique reason for why its subscription rates have been lower than expected. In a letter to shareholders, the streaming media provider says its subpar performance is partly due to America’s transition to chip-embedded credit cards.

How could the conversion to chip cards impact user subscriptions? The new cards come with new numbers and/or expiration dates, so current customers who receive new cards from their banks or credit card providers must update their information on Netflix to keep their accounts active. The company says this delay is causing subscription rates to drop.

To put matters in perspective, industry experts predicted a 1.25 million subscriber growth in the third quarter, but the company only saw an increase of 880,000 subscribers. This rate is still slightly ahead of last year, but not as strong as predicted.

The switch to EMV cards is far from over in America, despite the deadline that was set for October 1st. Some analysts believe the complete conversion may not take place until the end of 2016. If this is, in fact, the source of Netflix’s subpar performance, the company will be challenged for the next five quarters.

If you have a new chip credit card and have not updated your payment information on Netflix or any other automatic payment, let this be a friendly reminder to do so.



The information contained within this article was accurate as of October 20, 2015. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.