Netflix shares tumble 7% in after-hours trading after it reported Third-quarter results
After Netflix reported its third-quarter results, its shares went down by 7% in after-hours trading. The company has included only 880,000 US streaming subscribers in the quarter, which seems to be a cause of the investor shock. The number is down from 980,000 in the same period last year, and below its forecast of 1.15 million (pdf).
Netflix CEO Reed Hastings wrote a letter to investors in which he partially blamed America’s latest switch to chip-enabled credit cards. The credit card companies give new cards to their customers due to which some issue new numbers also. In case people don’t remember to update their credit card number with Netflix, or miss it, they can’t pay their bill, becoming what Hastings said is ‘involuntary churn’. Netflix is among the first US companies to report third-quarter results.
Besides this, there are a number of other things that are more annoying about getting a new credit card or replacing stolen card than updating recurring subscriptions to the new number. There are many cases wherein people forget to update their Netflix account. Whereas, some customers, possibly, on the fence to keep their Netflix subscriptions faced the annoyance of changing their card number, using it as an excuse for to halt paying altogether.
According to a quick survey of the Quartz newsroom, a few people got their numbers changed in the process of getting their chip-based cards, whereas others got to keep the same number.
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