Netflix (NASDAQ:NFLX) shares are higher today despite the broader market’s decline. This can be attributed to its efforts to prevent an estimated 100 million users from sharing passwords. Indeed, the company has released information about how it’ll stop this.
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Going forward, only people who live in the same home will be able to share the same account. To achieve this, users will have to log in through the main account holder’s WiFi network. However, if someone wants to watch outside their home, the main account holder can send a temporary code that lasts seven days after verifying the device.
Netflix saw a strong fourth quarter recently, as it added over 7 million subscribers. However, subscriber growth has proven to be volatile in the past, and significant spending on original content has been required to attract new customers. As a result, cracking down on password sharing is the low-hanging fruit that the firm is going after to further monetize its existing user base to reduce the impact of subscriber volatility.
Although investors appear to be slightly excited by the news, Wall Street is a little more cautious about NFLX stock. Despite the Moderate Buy rating from analyst consensus, the $347.29 price target implies 2.73% downside potential, as indicated by the picture above.
