Images

Analysts didn't buy it when Netflix (NASDAQ:NFLX) blamed credit card companies issuing new plastic to comply with new security chip requirements for softness in stateside subscriber growth in last week's quarterly results, and apparently other consumer-facing companies are skeptical.

Sirius XM Radio (NASDAQ:SIRI) was asked this morning about any trends that it's seeing with chip cards tripping up renewals for its media subscription service. It didn't hesitate to distance itself from the situation at Netflix.

"This year we've probably processed 50 million credit card transactions for something approaching $3 billion in volume, and we can't find any evidence of there being a chip-related breakage issue that's driving churn," CFO David Frear said during this morning's earnings call. "That's not to say it might not be there for somebody else, but it doesn't appear to be there for us."

Sirius XM isn't necessarily throwing Netflix under the bus. It was a Wall Street analyst posing the question, and Sirius XM responded honestly. It's not seeing any issue with renewals related to new cards rolling out, and its obligation is to stand up for itself rather than cover for another company.

Netflix and Sirius XM are two of the more successful subscription-based platforms in this country, servicing 43 million and 29 million stateside subscribers, respectively. One can always argue that Sirius XM might feel the sting in the future. Unlike Netflix, where subscribers pay every month, there are many Sirius XM accounts that pay at longer intervals to secure discounted rates. Just because something's not evident now doesn't mean that it will always remain that way.

Netflix argues that this wasn't just a matter of new cards being sent out. The new chip-secured plastic sometimes has a new expiration date, and that's resulting in charges being rejected. There's some logic to that, even if Wall Street is playing this out to be some phantom scapegoat. The Associated Press spoke to the CEO of Recurly, a bill pay manager for more than 1,900 subscription businesses, last week. He confirmed that there has been a slight increase in card declines. 

This doesn't mean that there aren't other factors that kept Netflix's sequential subscriber growth at just 880,000 in its latest quarter. With rival streaming services emerging, there's no way to know if there are any voluntary factors influencing what Netflix is dismissing as involuntary churn.

Either way, we now find Netflix with something to prove. It's expecting the current quarter to set a new record in terms of global sequential additions. If it falls short, it better not blame it on chip cards unless more subscription services are following suit.

Rick Munarriz owns shares of Netflix. The Motley Fool owns shares of and recommends Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.