Investors Doubt Netflix's Plans to Crack Down on Account Sharing

One of the leading OTT streaming platforms around the globe, Netflix Inc's plans to strike on account sharing failed to instill confidence in Wall Street that the world's largest streaming company had discovered a way to ignite new growth. On Wednesday, a day after Netflix announced that it would ask subscribers who share their accounts with other people outside of their households to pay more, its share was down 36% in trading. Netflix held password sharing as one of the major reasons behind the decline in subscribers. The extent of the shared accounts is estimated to be 100 million around the world. Out of these 100 million shared accounts, 30 million are in the United States and Canada.

Media analyst Michael Nathanson wrote that the crackdown on password sharing indicates OTT giant thinks it's "hitting a wall" at 221.6 million subscribers. He wrote, "Any company with large out-year subscriber and (revenue) targets should be a bit more nervous today." Gregory Peters, Netflix's Chief Operating Officer, on Tuesday informed investors that the company would not stop a subscriber from sharing with a sister. "But we're going to ask you to pay a bit more to be able to share with her and so that she gets the benefit and the value of the service, but we also get the revenue associated with that viewing."