On May 23rd, Netflix finally began its long-rumored and much-discussed “crackdown” on password sharing in the U.S. market. The action began with the company notifying subscribers that any user living at another address than the primary account holder would need to be added explicitly as an “extra member” on the account. In the days following this announcement, Netflix experienced more than twice the daily rate of new subscribers.
A report from Antenna, the leading firm focused on tracking the streaming market, shows a 102% increase in new Netflix subscriptions from May 25th-28th compared to the average daily rate over the 60 days prior to the announcement. Cancelations also increased but at a significantly lower number than new sign-ups.
Based on this surge in “extra members” being added to existing accounts at $7.99 per month, it now seems that Netflix’s “crackdown” will result in an uptick in revenue. Wall Street’s stock tracking firm Pivotal Research raised the year-end outlook for Netflix’s share price to $535 per share from $425, an increase of more than 20%.