Buffering? Netflix Blames Slow U.S. Growth on New Credit Cards

by Associated Press /  / Updated 

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Netflix is hooking fewer U.S. viewers than it hoped, even as its binge-watching addiction rapidly spreads to other parts of the world.

The Internet video service added 3.62 million subscribers during the three months ended September, it announced Wednesday as part of its third-quarter earnings. That's slightly more than the company had predicted.

Read More: Netflix Hikes Price of Standard Streaming Plan to $9.99 a Month

But Netflix didn't gain as many U.S. subscribers during the latest quarter as management anticipated, a shortfall that it blamed on an unusually large number of accounts cancelled because the company couldn't charge their credit cards. The company believes the trouble is tied to the new credit-card account numbers banks are issuing as they adopt card technology based on computer chips instead of magnetic stripes.

More of the cards still need to be issued, raising the specter of more subscriber cancellations in the months ahead. Netflix also recently announced a price increase on its most popular U.S. plan.

In the third quarter, Netflix gained 880,000 subscribers in the U.S., below the 1.15 million customers that the company had predicted. It was also fewer than the 980,000 U.S. subscribers that the service added this time last year.

"The business is still growing by leaps and bounds," Netflix CEO Reed Hastings said in an interview. "We are taking it in stride because people want on-demand television. We are very excited about it."

Read More: Netflix Acquires Global Streaming Rights to 3 More U.S. TV Shows

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