Benzinga - Streaming giant Netflix Inc (NASDAQ: NFLX) is known as a market leader in the sector. The company could see its subscriber counts go up with the launch of a new ad tier and a crackdown on password sharing.
Here’s a look at how social media is reacting to the possible hypocrisy of the password sharing policy — and how shares have performed since an infamous tweet about love.
What Happened: Netflix ended the fourth quarter with 230.75 million paid subscribers, adding 7.7 million in the most recent quarter, beating company expectations.
For future growth, Netflix is turning to an ad-tier platform, which launched in late 2022, and a crackdown on password sharing, which could see current subscribers having to purchase additional plans or pay for higher priced tiers.
Many on social media are calling out a tweet from Netflix in 2017 that showed they didn’t seem to mind about password sharing at the time.
“Love is an addiction. Love is sharing a password,” Netflix tweeted on March 10, 2017.
Netflix said this week it will crack down on password sharing and require accounts and devices to use the same WiFi as the TV that links to the Netflix account. Customers are being urged to set a primary location through their TV and could be forced to connect to Wi-Fi on each device every month if content is not watched.
The new practice didn’t go over well with Netflix customers and fans, likely due to the steps needed and the crackdown on password sharing.
For Netflix it could be a necessary evil to boost revenue in the highly competitive streaming market without raising the costs of monthly plans.
Here’s a look at how Netflix stock has performed since the tweet.
Related Link: Here's How Much Extra Subscribers Netflix Is Expecting With Ad-Supported Plan
Investing $1,000 in NFLX Stock: Netflix shares hit an intraday high of $141.88 on March 10, 2017, the day the tweet about sharing passwords being love was posted.
A $1,000 investment could have purchased 7.05 shares at the time. The $1,000 investment would be worth $2,643.26 today, based on a price of $374.93 for Netflix shares at the time of writing.
This represents a hypothetical return of 164.3% or an average annual return of 27.4% over the last six years.
For comparison, the SPDR S&P 500 ETF Trust (NYSE: SPY), which tracks the S&P 500 Index, is up 74.9% over the same time period.
This hypothetical investment exercise shows that Netflix has beaten the broader market since posting a tweet about sharing passwords being love.
The big question now is whether Netflix will outperform the market after the password crackdown. Six years from now, things could look completely different.
Read Next: Here's How Much Netflix's Ad-Supported Plan Costs And How It Compares To Rivals
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