Netflix has determined it is time to start cracking down on the password sharing they pretty much ignored-to-encouraged over the years. Having added some account transfer features, the whole "everyone should pay us individually because it'd be better for our shareholders" strategem is off to the races.
Reports from the test markets weren't great and subscriber counts were down, but Netflix is optimistic that pissing off their users will increase revenue. The wisdom evades me, but the entire streaming industry seems to be capsizing "Hollywood," so there is that.
"We expect a lot of noise in 2Q23, and are being very conservative in our own modeling of churn in response to password crackdown," Jefferies wrote in a note to clients late last month.
"However, we believe most of that churn will be somewhat impulsive, as it has minimal impact on the existing subscriber, and those members will return to the service over the course of 2023."
Jefferies recommends "buying any dip associated with a conservative 2Q23 guide," adding Netflix is poised to be the number one distributor in video content amid those longer-term revenue drivers while discipline around content spend will "jumpstart" margin and free cash flow expansion efforts.
I rarely use my "family" Netflix account, which is shared with my daughter. I need to go look up guidelines and see when my daughter no longer qualifies as an immediate family member or "of my household." If I have to kick her off my Netflix account, can I turn her bedroom into a home theater? Netflix says sleep in the shed, kid!
