Regardless of whether someone is a proficient trader or an ordinary person, when it comes to wrapping oneself in a blanket with a slice of something yummy in one hand and a cup of something hot in the other while Netflix binge-watching, everyone's the same. However, the impact of Netflix’s crackdown on password sharing on the company’s stock may not concern the average person.

The streaming giant has been gradually implementing its new password protocol worldwide. Recently, the company started notifying customers who have shared their accounts with people outside their families about the new policy. This means that only users who are part of “Netflix Household” will have access to the account unless additional users are paid for and added to a plan.

And guess what… Despite protests from people across the globe, there hasn’t been a mass exodus from Netflix. It’s actually the opposite. The restrictions have positively affected the streaming giant’s number of subscribers. According to data research firm Antenna, the four days following the implementation of the password crackdown resulted in the highest number of new sign-ups since January 2019 (102% increase). This surpasses the gains seen during the pandemic, when people were confined to their homes and seeking entertainment. Users seem to have simply accepted the new terms.

Netflix Stock Chart by TradingView
Netflix Stock Chart by TradingView

Above you can see the resulting surge in Netflix stock, rising by 28% over the last month and 156% over the year, while the entire streaming industry is navigating the challenges posed by the massive Writers Strike.

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Now, the question arises: How does Netflix identify password sharing? Sadly, the company identifies rule breakers by collecting substantial data about its users.

It may be too early to draw definitive conclusions, but the experiment was a success at first glance. It’s highly likely that other major streaming platforms such as HBO, Amazon, Apple, Hulu, Disney, and Paramount will soon follow suit.