Netflix is blaming credit cards for its disappointing third-quarter figures that did not quite meet its own forecast. It has since announced that it is looking into news programming, a staple which could hopefully help it gain more subscribers.
According to Reuters, the video-streaming service provider admitted that it failed to meet its target number of U.S. subscribers for its third quarter report. Its shares also took a 15 percent plunge because of this, and Netflix is putting the blame on credit card companies for switching its customers cards to chip cards prior to the first day of October.
CEO Reed Hastings disclosed to shareholders in a letter that the switch of the credit cards caused an "involuntary churn" since the old cards of the company's users no longer worked.
Netflix was anticipating a growth of 1.15 million users in the third quarter, but it only got 880,000 subscribers to join its service.
Additionally, the streaming service also struggles with the major competition in the market despite capturing the interest of new users and keeping its loyal subscribers who continue to enjoy its offerings, including its award-winning shows "Orange is the New Black" and "House of Cards," as per The Guardian.
Hulu and Amazon have gathered a large following after they also invested in prestige comedy and drama series. HBO is also doing well amid the tight competition mix.
Despite pointing out the "flaw" that caused the company's failure to meet its forecast, several analysts are not buying the credit card excuse.
Wedbush Securities analyst Michael Pachter was quoted as saying, "It's just the dumbest thing I've heard."
FBR Capital Markets analyst Barton Crockett on the other hand said, "It begs a million questions."
Nevertheless, Netflix appears to be determined to pull more subscribers into its streaming service by tapping another staple, news programming, Variety noted.
Hastings, along with chief content officers Ted Sarandos said the company is headed toward that direction.
A Netflix rep also confirmed the news saying the company is attempting to get into the "reporting and live news business."
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