Netflix sets its sights on 74 million subscribers by the end of 2015.
In a letter to investors, Netflix, No. 6 in the Internet Retailer 2015 Top 500 Guide, reported 3.62 million new members signed up for the service during the third quarter, putting total membership at over 69 million. While Netflix added 34.3% more international subscribers during the quarter than it did during the same time last year (2.74 million versus 2.04 million a year ago), domestic growth actually declined slightly. In the U.S., Netflix added 880,000 subscribers, down 10.2% from 980,000 during the same period last year.
Netflix chief financial officer David Wells blamed stagnant domestic new subscriptions on new credit cards being issued to customers nationwide. Netflix said some U.S. subscribers got dropped after the cards stored on its system stopped working.
“We think partially that was due to the transition to the chip cards, which is ongoing,” he told analysts on the call, according to a transcript from Seeking Alpha. “It’s not consistently the case that people don’t have the same account number, [but] some issuers are going to replace that number when they issue [a new chip card].” The new standard for debit and credit card payments uses cards with microprocessor chips rather than the decades-old magnetic stripe technology.
The company says it plans to double its third quarter growth in the fourth quarter: “For Q4, we anticipate 1.65 million U.S. net adds.”
For the third quarter ended Sept. 30, Netflix reported:
- Net revenue of $1.738 billion, up 23.3% from $1.409 billion during the same time last year.
- Net income of $29.4 million, down 50.4% from $59.3 million during the same time last year.
For the first nine months of 2015, Netflix reported:
- Net revenue of $4.956 billion, up 23.3% from $4.020 billion during the same time last year.
- Net income of $79.5 million, down 56.7% from $183.4 million during the same time last year.