Netflix has daft excuse for poor sign ups

netflix_3038088bInternet video streaming outfit Nexflx has come up with a truly daft reason for not adding as many subscribers as Wall Street expected.

Netflix said it only added 0.88 million U.S. subscribers in the third quarter ended September 30, compared with its forecast of 1.15 million.

The outfit blamed a move in the US to chip based cards. US credit and debit card companies have been shifting to chip-enabled cards ahead of the October 1 deadline.

Netflix claimed that the switch meant that many of the older cards on its file no longer worked as the companies gave new cards to their customers.

Chief Executive Reed Hastings made the claim in a letter to shareholders, but the statement was widely condemned.

Wedbush Securities analyst Michael Pachter went on record saying it was the “just the dumbest thing I’ve heard”.

Other analysts thought that given that the cards have been around for a bit the statement created more questions than it answered.

Netflix increased the subscription rate for some new members earlier this month by $1.00 a month to $9.99 in the United States, Canada and Latin America.

Internationally, Netflix added 2.74 million subscribers, compared with its projection of 2.40 million.

Netflix, which is also battling competition from streaming services such as Amazon.com Prime Video service and Hulu, has been aggressively building its overseas presence.

Netflix forecast adding about 1.65 million customers in the United States in the current quarter. It also said it expected to add about 3.50 million subscribers worldwide.