For the past year, Netflix has been adamant about cracking down on password sharing, and over the last few months, it is becoming more and more of a reality. The streamer has begun rolling out new guidelines internationally, limiting subscribers from being able to access their accounts from multiple households — which yes, has sparked concern from college students, unconventional families, military families, caretakers and more.
It was last suggested that these new rules would arrive to the United States by the end of March, however the streamer has been hush about future plans after leaked password sharing details caused controversy earlier this year. Now, banks are chiming in on the discourse, with the latest being Wells Fargo, who suggests that Netflix could receive an increase of roughly $3 billion after the password sharing crackdown — that is, if they don’t say goodbye to longtime subscribers.
According to IndieWire, a March 29 research report from Wells Fargo suggests that people sharing a Netflix login will likely pay more to become a new subscriber, rather than be added to a primary account.
In that case, Netflix would receive more money for the new account, in comparison to the smaller add-on cost, which was previously estimated to be between about $3.50 and $4, but is being considered as $7.99 by Wells Fargo.
Currently, the streamer charges between $6.99-$19.99 per month for subscriptions, with the lowest cost being the ad-supported tier. As of 2022, the most popular Netflix plan is the standard account, which clocks in at $15.49 per month.
Wells Fargo analysts suggest that there are roughly 30 million shared Netflix accounts in the United States and Canada. They estimate that roughly 15% will pay to add another user to the existing account and roughly 25% will become a new subscriber.
Indiewire reports that Well Fargo’s numbers suggest a new revenue stream of $900 million to $2.5 billion, compared to Wall Street’s estimate of $2 million and Oppenheimer & Co. estimate of $2-9 million.
However, these numbers don’t consider Netflix’s potential subscriber loss, which has been a polarizing topic, with some stating that the outrage has been over-exaggerated. Earlier this month, Forbes ran a study which found that 35% of its 1,000 subjects said they would cancel Netflix if prices go up and password-sharing is enforced. FierceVideo ran a similar study and found that roughly 13% of its 2,200 subjects stated they would cancel their subscription.
Michael Greeson, founder and principal analyst at Aluma, was confident that Netflix would see the subscriber loss and gain even out – using the estimate of $3 per add on vs $7 – but it would “take several quarters before this is evident to investors” and could come at the cost of “rubbing loyal subscribers the wrong way,” per FierceVideo.
Last week, JPMorgan claimed that Netflix has pushed its password-sharing rollout from the first quarter to the second. They also stated that it could lead to an increase in stock price.
Well, as always: the ball is in your court, Netflix.