Netflix reported declining profits in the third quarter due to higher costs paired with a decreasing domestic customer base. To make matters worse, the company linked their profit struggles to growing chip-based debit and credit cards. Since these chips enable extra security by adding a code to every transaction, Netflix was forced to cancel certain services.
Despite Netflix’s domestic troubles, the business has been successful in the overseas markets. The company added 2.74 million subscribers overseas even though it only projected an additional 2.4 million. With international expansion in progress, Netflix plans to break even in 2016, but expects to profit from the development in following years.
With Netflix’s prolific growth this decade, media companies are more skeptical with licensing their content to online providers. Since companies like Hulu are able to release ad-free content the day after shows air on TV, networks have grown wary of streaming services. Netflix is trying to be less disruptive to broadcasting networks, and is focusing more on original programming.