Netflix reported that its crackdown on password sharing has driven 8 million new subscriber activations in the United States and Canada over the past six months, exceeding analyst expectations and demonstrating the effectiveness of the controversial policy.
"The results have exceeded our most optimistic projections," said Netflix co-CEO Greg Peters. "We knew there was significant demand for our service that was being satisfied through unauthorized sharing, and the conversion rate has confirmed that assessment."
The policy, which requires account holders to verify their household through IP addresses and device logging, was initially met with significant backlash when implemented in 2023. However, the company's subscriber growth in subsequent quarters has validated the approach.
"This represents one of the most effective subscriber acquisition campaigns in streaming history," said Morgan Stanley analyst Benjamin Swinburne. "The cost of enforcement was minimal compared to the revenue generated by converting free users to paying subscribers."
The company also reported that average revenue per user has increased 6 percent following the policy implementation, as many former sharers have upgraded to premium plans rather than maintaining basic subscriptions. Netflix now has 280 million subscribers globally.