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Netflix U.S. Signups Rise Amid Password Crackdown

The new insights provided by the analytics platform Antenna reveal that Netflix U.S. signups had rised amid password sharing crackdown. Credit: StockCatalog / Wikimedia Commons / CC BY 2.0

Netflix (NFLX) stock experienced a noteworthy increase of over 3% on Friday, propelled by fresh insights provided by the analytics platform Antenna.

The data revealed a significant surge in new subscribers for the streaming service in the United States, marking the most substantial growth in at least four and a half years.

This surge in sign-ups can be attributed to Netflix’s recent implementation of measures aimed at curbing the practice of sharing passwords.

Antenna’s data, which began tracking this information in 2019, indicates that between May 25 and May 28, Netflix observed its four highest single-day sign-up figures in the United States.

Notably, on both May 26 and May 27, the streaming service witnessed nearly 100,000 new daily subscriptions.

This spike in sign-ups followed Netflix’s decision to expand its crackdown on password sharing, encompassing not only the United States but also over 100 other countries and territories, starting on May 23.

‘A Netflix account is for use by one household’

The company made it clear that a Netflix account is meant to be used by a single household, according to the Netflix official blog post.

The company emphasized that all individuals residing in the same household can enjoy Netflix’s services from various locations, such as their home, while on the move, or even during vacations.

Additionally, Netflix highlighted the introduction of new features like Transfer Profile and Manage Access and Devices, further enhancing the user experience.

As an update to their policy, the company has announced that users now have the option to share their Netflix account with someone who does not reside in the same household, but this will come at an additional cost of $7.99 per month.

Expanding their efforts, Netflix implemented stricter measures in early February, targeting not only the United States but also several other countries. These include Canada, New Zealand, Portugal, and Spain, in addition to the test countries of Chile, Costa Rica, and Peru.

The company had previously stated that the policy would be rolled out widely during this quarter, signaling its intention to reach a larger audience with its new approach.

Netflix’s new strategy paves the way for long-term growth

Despite concerns raised by users, financial analysts on Wall Street maintain an optimistic outlook regarding Netflix’s initiative, recognizing its potential as a catalyst for long-term growth. This sentiment is further supported by the recent introduction of an ad-supported subscription tier on the platform.

Pivotal Research demonstrated confidence in Netflix’s strategy by raising its price target for Netflix stock to $535 per share, the highest target on Wall Street, up from $425.

Moreover, Pivotal Research emphasized that the password crackdown, in conjunction with the ad-supported tier, positions Netflix favorably for user and cash flow growth, even in a recessionary economic climate.

Similarly, Wells Fargo revised its price target to $500 per share, up from $400, while JPMorgan increased its target to $470 from $380 earlier in the week.

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