Netflix’s revenue may increase as password sharing fee launches
Now Netflix (NASDAQ:NFLX) has launched the biggest crackdown on subscribers sharing their account passwords, questions are being raised across Wall Street as to what, if any, impact this could have. on the streaming giant’s revenue figures.
According to Loop Capital analyst Alan Gould, Netflix (NFLX) will see its sales actually pick up a bit, but it makes sense since it charges members extra for sharing their passwords outside of their homes.
Gould said a survey of more than 500 Netflix in the country (NFLX) users suggested that charging for password sharing and limiting the number of accounts shared could promote (NFLX) decreased revenue by 3%, decreased the number of paying customers by 19%, and resulted in a 27% increase in average revenue per user [ARPU].
Netflix (NFLX) began testing charging for password sharing in Latin America a few months ago. On February 8, the company said it started charging for password sharing in Canada, New Zealand, Spain, and Portugal, and that Canadian members have until February 21 to book a primary location. for their account. Gould says the sharing fee is less than half the price of Netflix (NFLX) standard plans in those four markets.
Gould said that Netflix (NFLX) seems confident that “charging for passwords will increase revenue”, what Gould calls the company’s “Northern Star”.
As far as when Netflix (NFLX) may begin charging for password sharing in the United States, Gould said the company will likely evaluate initial data from Canada, New Zealand, Spain and Portugal, before rolling out the program, maybe in the middle of this year.
At the end of February, it was reported that Netflix (NFLX) has begun to drop prices in some regions in the Middle East, Europe and Latin America in an effort to drive subscriber growth.