Topline
So far, Netflix’s password-sharing crackdown has been a boon for the company, with new data showing subscriptions hit a recent high in the four days after it announced users could no longer share accounts, and the streaming company’s stock is up 15%.
Netflix announced in May it would restrict password sharing across households.
Key Facts
Netflix saw the four single largest days for new U.S. subscriptions since at least 2019 after it announced on May 23 it would no longer permit password sharing between households, according to data from analytics firm Antenna, which uses third-party sources to collect consumer information with permission.
Average daily sign-ups hit 73,000 from May 24 to May 28, a 102% increase from the daily average during the previous 60 days.
The company had nearly 100,000 new subscribers on May 26 and 27, shattering the record high for any day since Antenna began tracking data in 2019, including the previous high during the start of Covid-19, when daily sign-ups peaked at under 90,000.
Netflix stock has risen almost 15% during the two and a half weeks since its password sharing crackdown, and was up 4% pre-market on Friday.
Key Background
On May 23, Netflix announced users who want to share their account with someone outside their household must pay an additional $7.99, or could transfer a profile to a new membership someone else pays for. Netflix first began restricting password sharing in Canada, New Zealand, Portugal and Spain earlier this year to crack down on the roughly 100 million people who share accounts, according to the company. It’s one of the first major streaming services to put limits on password sharing, a move that comes after Netflix experienced its first subscriber loss in a decade—losing almost a million during the summer of 2022, though it regained those declines in the second half of the year. The password crackdown was initially expected to begin at the start of 2023, but was pushed to the spring, prompting the streaming giant to squeeze spending by $300 million during the first quarter of the year.
Further Reading
Netflix Starts Long-Awaited Password-Sharing Crackdown—Here’s How (Forbes)
Netflix Loses Subscribers As Disney+ Catches Up: Here’s How The Major Streaming Services Are Faring So Far This Year (Forbes)
Netflix Reportedly Cutting Spending By $300 Million After Delay On Password Sharing Crackdown (Forbes)
Source: https://www.forbes.com/sites/katherinehamilton/2023/06/09/netflix-password-crackdown-boosts-subscribers-stock-price/