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Netflix’s Crackdown on Password Sharing Emboldens Stock Bulls
Posted
April 6, 2023
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April 6, 2023
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1:00Now PlayingWall Street loves Netflix's password sharing crackdown. Analysts say the move could push millions of borrowers to spring for their own plans. Bloomberg Quicktake's Scarlet Fu explains.
In 2017, Netflix Inc. tweeted that “love is sharing a password.” In 2023, Wall Street loves that the company has changed its tune.
The video-streaming giant is cracking down on the ability of its users to share subscriptions across locations, a move that analysts say could push millions of borrowers to spring for their own plans. This strategy, along with the debut of a lower-cost tier with advertising, could keep user growth robust, supporting an extended rebound in the stock.
“There are millions of people on shared accounts, and if you get a few bucks per month out of even a small percentage of them, that creates a huge recurring revenue base that can supplement current growth,” said Jamie Lumley, senior analyst at Third Bridge, who sees the crackdown as a “huge opportunity” for the company.
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