Netflix password crackdown boosts new subscribers to highest level since Covid began

Early results indicate Netflix’s new plan to boost its bottom line by cracking down on password sharing in the United States is paying off. The streaming service has seen a bigger jump in new subscriber sign-ups as a result of the crackdown than it did in the early days of the Covid pandemic. That’s according to data collected by streaming analytics company Antenna, which reported Friday that Netflix had its “four single largest days” of new user sign-ups in the United States in late May in the more than four years that firm has been measuring the service. Netflix added 100,000 new accounts on both May 26 and May 27, shortly after the crackdown went into effect, Antenna’s data found. In the following days, 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 popped on the news, rising nearly 2% in early trading Friday. Shares have climbed over 27%, to about $415, over the last month. For years, Netflix turned a blind eye to password sharing because it was fueling growth. But the streamer suffered heavy subscriber losses last year, and said that password sharing hurt its revenues and therefore limited its ability to invest in new content. It has previously estimated that more than 100 million households worldwide share an account. Last month, the service alerted US subscribers that if they share passwords with people outside of their household, they would have to add an extra member to their account for an additional $7.99 monthly fee — or sign up for a new account. It also plans to block users with unauthorized passwords. The company started to clamp down on password sharing in several countries earlier this year, including Canada, New Zealand, Portugal and Spain. Netflix recently reported a net increase of 1.75 million global streaming subscribers in the first quarter, up nearly 5% from the same period in the prior year, but below the more than 3 million Wall Street analysts had expected. Netflix said in an earnings call last month that it has seen a “cancel reaction in each market when we announce the news” about the paid sharing option, but then it sees “increased acquisition and revenue.”