Early data indicate that Netflix’s new approach to enhancing its bottom line in the United States by cracking down on password sharing is paying off. The crackdown has resulted in a greater increase in new subscriber sign-ups for the streaming service than it did during the early days of the Covid epidemic. According to data compiled by streaming analytics firm Antenna, Netflix experienced its “four single largest days” of new customer sign-ups in the United States in late May in the more than four years the business has been analyzing the service.
According to Antenna’s statistics, Netflix added 100,000 new accounts on both May 26 and May 27, just after the ban went into effect. In the days that followed, Netflix has seen a more than 100% increase in sign-ups from the prior 60-day average.
“These exceed the spikes in sign-ups Antenna observed during the initial US Covid-19 lockdowns in March and April 2020,” the firm said in a report. It also noted that “cancels also increased during this period, but not as much as sign-ups.”
Netflix (NFLX) shares rose about 2% in early trading Friday as a result of the announcement. Over the previous month, shares have risen by more than 27% to almost $415.
Netflix’s crackdown on password sharing drives increased acquisition and revenue
For years, Netflix ignored password sharing since it was supporting growth. However, the streamer suffered significant subscriber losses last year and stated that password sharing damaged its income, limiting its capacity to invest in new programming. It has previously been projected that over 100 million households throughout the world share one account.
Last month, the site informed US members that if they shared passwords with persons outside their homes, they would be required to add an extra member to their account for an additional $7.99 monthly price – or sign up for a new account. It also plans to block users with unauthorized passwords.
Earlier this year, the business began cracking down on password sharing in numerous countries, including Canada, New Zealand, Portugal, and Spain.
Netflix just reported a net growth of 1.75 million global streaming customers in the first quarter, up over 5% from the same period last year but falling short of the more than 3 million Wall Street experts had predicted. In a recent earnings call, Netflix stated that it has seen a “cancel reaction in each market when we announce the news” about the paid sharing option, but that it has since seen “increased acquisition and revenue.”