Netflix may soon discover how many viewers agree to pay for using its service.

The video streaming giant is taking a firm stand against people sharing account passwords and testing a feature that prompts non-paying viewers to purchase subscriptions. A company spokesperson wrote that the test “is designed to help ensure that people using Netflix accounts are authorized to do so.”

A key question on Wall Street is how many users will become paying users. Although several analysts are confident that most analysts do not want to give up the opportunity to enter programs like Bridgerton or The Queen’s Gambit, when competitors’ services add millions of subscribers, this problem brings inconvenience. Certainty.

As investors consider its prospects after the pandemic, Netflix has performed poorly. In the past six months, the stock has risen about 3%, while the Nasdaq 100 index has risen 13%. The stock fell 0.4% on Monday.

For Benchmark’s Matthew Harrigan, during the launch of the Covid-19 vaccine, “because consumers around the world are reluctant to sit down on the couch,” its performance may continue. He pointed out that password cracking may weaken Netflix’s pricing power.

Last week, Needham said that subscriber loss-the number of customers who abandon their subscription-is the biggest risk Netflix faces in 2021.

At the same time, BMO Capital Markets is more optimistic, saying that the strategy may “help drive total subscriber growth.” Bloomberg Intelligence recently wrote that a severe crackdown “may increase revenue by 10%” despite the move. There is a risk of alienating users, which may increase the churn rate.”

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The predictions about the percentage of subscribers sharing accounts with people outside the household will be different. Bloomberg Intelligence said that 20% to 30% of Netflix’s 74 million home users may share this information, while market research company Magid cited a survey conducted last year and estimated that one-third of subscribers this way.

©2021 Bloomberg (Bloomberg LP)

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