The strict enforcement of Netflix‘s policy against password sharing significantly boosted the number of new subscribers to their streaming platform on a global scale.
After the positive impact from limiting the number of users per subscription starts to diminish, Netflix’s subscriber growth is predicted to decelerate. In other words, while Netflix may still see some robust subscriber growth for a few more quarters due to its content lineup and new ad-tier, it is anticipated that the benefits gained from stopping password sharing will gradually decrease as well. This is according to Robert Fishman, an analyst with MoffettNathanson Research, in his March 6 report.
The analysis published on Thursday led to a decrease of $84.56, or 8.5%, in Netflix’s stock price, ending the day at $906.36. It will be challenging to gauge any future decline in subscriber numbers since Netflix discontinued reporting quarterly subscriber figures at the start of 2025 to focus on revenue and profit growth instead.
In the last three months of 2024, a historic boxing event featuring Mike Tyson and Jake Paul on Netflix, as well as NFL coverage, contributed to the streaming service gaining an unprecedented 19 million new subscribers, setting a new benchmark for the company, outperforming even its peak numbers during the COVID-19 pandemic.
However, according to the MoffettNathanson report, having more individuals use their own login credentials instead of sharing them and paying for their own accounts can bring advantages. This doesn’t necessarily mean that services like Netflix would gain a significant number of new customers in this scenario.
In other words, the increased number of Netflix subscribers worldwide doesn’t necessarily mean a large increase in users. Instead, it appears that Netflix is effectively maximizing revenue from its current user base.
Concurrently, potential increases in Netflix’s future earnings could be triggered by their recent decision to implement price hikes for the first time in two years, which includes an upward adjustment to their ad-supported plan, as well as their ongoing expansion of their advertising sector.
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2025-03-07 00:54