Netflix cracks down on US password sharing

Netflix's day of reconning has arrived in the US. Last week the company started to notify users that Netflix accounts are only to be shared within a single household, and that password sharing with users outside of the household would result in an extra fee of $7.99 per person.

The US is Netflix's most important market, so this is a crucial moment for the company. In test runs in smaller countries, the password sharing crackdown was initially met with some account cancellations, but many of those users returned and paid for the extra subscriptions. The forecast is for something similar to happen in the US. This is only possible if Netflix keeps producing top content.

The US market has much more streaming competition than the rest of the world, so there is a risk that users quit in protest of the extra fees and then never rejoin. How things go with the password crackdown in the US will drive the Netflix share price for the next 6 - 12 months. We will keep you updated.