Netflix’s Crackdown on Password Sharing Pays Off: Subscriptions Are Up

The pace of sign-ups for the streaming giant surpassed the early days of the pandemic after it limited how users can share accounts

Arnold Schwarzenegger in "Fubar."
Arnold Schwarzenegger in "Fubar." (Christos Kalohoridis/Netflix)

Netflix’s crackdown on password sharing is an early success, driving a surge of new subscribers to the streaming giant that topped the surge it saw during the start of the Covid-19 pandemic.

The No. 1 streamer booked more new U.S. subscriptions in the four days after Netflix began its crackdown than in any other four-day period since streaming analytics company Antenna counted since it started tracking the data in 2019.

Average daily sign-ups to Netflix reached 73,000 during that period, Antenna said, a 102% increase from the prior 60-day average. Based on the most current data available, Netflix saw nearly 100,000 daily sign-ups on both May 26 and May 27, the tracking service said.

“These exceed the spikes in sign-ups Antenna observed during the initial U.S. Covid-19 lockdowns in March and April 2020,” it said.

Netflix Ad Tier Sign-Ups (Courtesy of Antenna)

Netflix began filtering out subscribers who allow friends and family members in other households to use their accounts on May 23, after sending out warnings to customers in more than 100 countries around the world that it would begin policing the practice.

Notably, cancellations also increased during those days, but sign-ups outpaced the departures. The ratio of sign-ups to cancellations since May 23rd is up 25.6% compared to the previous 60-day period, Antenna said. 

Antenna collects data from uses third-party services including online purchase receipts, bills and banking records. Its data does not include subscriptions offered through bundles, which could mean that Netflix has drawn even more new subscribers. 

Netflix could not immediately be reached for comment.

Prior to the crackdown, Netflix calculated that more than 100 million households share accounts, a vast untapped base of potential subscribers. In April, the company said it had tested the crackdown across Canada, New Zealand, Spain and Portugal, following an earlier effort in Latin America, and success in those territories convinced the company “that we have the right approach.”

The new rules add a $7.99 charge for subscribers who share accounts across different households and limits how many extra customers can be added to the account based on which service tier they’ve purchased. Users are required to connect to Wi-Fi at their primary location and stream content at least once every 31 days on their television, app or web browser to establish them as “trusted devices.”

Shares of Netflix have jumped about 15% since the crackdown started, and gained another 2.6% in morning trading Thursday to $420.02, after earlier hitting $424.65, their highest point since January 2022.

The market gains followed a note from Pivotal Research analyst Jeffrey Wlodarczak, who upped his price target on the stock to $535 from $425, according to

That means Wlodarczak, who kept a “Buy” rating on the stock, expects Netflix shares to rise more than 30% in the next 12 months. It’s the highest target among the over 30 Wall Street analysts who track Netflix stock.

Wlodarczak wrote that Netflix represents a “unique tech growth story” and remains well positioned to generate solid subscriber and free cash flow growth even if the economy takes a turn toward recession. He pointed in particular to the company’s “better monetization” of those 100 million-plus households that currently share passwords.

The growth should be enhanced by the Netflix’s ad-supported tier, the analyst added.

The streamer said last month, prior to the password crackdown, that its ad tier had grown to nearly 5 million active users in its first six months.

Last year, Netflix reported subscriber losses in the first and second quarters, the first time in the company’s history it recorded back-to-back declines. Subscriber growth has since returned, but at a slower pace than in the past.