I saw an article suggesting that Netflix lose $6 billion per annum on password sharing. It was based on the premise that streaming services lose $25 billion a year on password sharing and Netflix owns 25% of the market. You may even find that because Netflix is more desirable, they lose more.
That is a lot of money that can be brought back into the coffers if they solve the problem. For reference sake they made revenues of $25 billion last year. $6 billion is 24% of that. You would imagine that with smart artificial intelligence technology they will be able to limit devices that subscribers can use outside of their own devices. Either way, this a good upside story for Netflix.
Whilst researching for this piece I took a look at the Netflix share price graph. It must be one of the only companies out there where you cannot find the huge dip of March 2020 when the world went into lockdown. The reasons are obvious but there was barely a blip. See the red circle in the image below.
We still think Netflix is a fabulous business. They are starting to bring in enough profit to pay off their debt issued to create content. Soon the content will pay for itself and more. The space is competitive, but Netflix are first movers, have set the standard and should continue to dominate.
http://www.vestact.com/images/nflx_apr_21.png