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HomeMarketNetflix's Password Crackdown Has Angered Users. One Analyst Isn’t Worried.

Netflix’s Password Crackdown Has Angered Users. One Analyst Isn’t Worried.

Netflix will change its password rules this quarter.

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Alastair Pike/AFP via Getty Images

users aren’t making any bones about how unhappy they are that the streaming service intends to crack down on password sharing. And more than a few password borrowers are promising that they won’t come back if they’re kicked off.

But one analyst isn’t worried about their threat. Andrew Uerkwitz, of Jefferies, sees the get-tough changes as an opportunity for
(ticker: NFLIX) to convert borrowers into paying customers.

Uerkwitz came to his conclusion after evaluating a survey of Netflix password borrowers that his firm conducted about the coming clampdown.

Not quite two-thirds—62%—of the 380 respondents said they would stop using Netflix if the plan goes into effect. To most of us, that promise would be a negative—but not Uerkwitz, who rates the stock Buy and raised his price target to $425 from $400 over the weekend.

“Our estimates imply 21% retention of borrowers in 2023, growing to about 45% by end of 2024—we feel good about this in light of a survey where 38% indicate immediate retention upon password-sharing crackdown,” he wrote in a research note on Sunday.

The analyst added that the 62% “act as upside to out-year numbers” because users could come back if other streaming services raise their prices and crack down on sharing as well.

Netflix has major hits, and “the scale of Netflix’s content production becomes more obvious as users try to replace the service,” he wrote.

The streaming service accidentally posted its crackdown plans for global users on its website last week. The plan, which was eventually taken down, called for users to log into their home Wi-Fi and for users at different locations to be kicked off the same account.

Netflix estimates that there are approximately 100 million households that watch its content without an account. If even a fraction of borrowers become subscribers—the hits “Stranger Things” and “Wednesday” would be big draws—the streaming service could dramatically improve revenue and subscription numbers.

The company is aware that the plan won’t be popular with many users. On the company’s most recent earnings call, in January, management said it expects there will be users who that cancel their memberships in response to the changes. However, the company overall sees kicking off borrowers as an important next step.

In trading on Monday, the stock was down 0.4% to $364.68.

Write to Angela Palumbo at


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