NEW YORK—The cost of password sharing for Netflix is an estimated $6 billion per year, according to Citi equity analyst Jason Bazinet. That is about a quarter of what Netflix made in the last fiscal year.
The habit of sharing online passwords to streaming and other subscription video-on-demand services amounts to about $25 billion in lost revenue, Bazinet reports. Netflix accounts for about 25%.
Bank of America shared a note on March 12 that suggested a “substantial percentage” of streaming subscribers share their passwords with friends, family and others outside their home.
Netflix is the most popular, but Citi expects that the newer streaming services like Disney+, HBO Max, Peacock, Paramount+ and others could see a similar impact in the future.
“As streaming services move to center stage, thwarting this theft will be of growing importance for shareholders,” said Bazinet.
Netflix is taking steps to potentially address the issue of password sharing. It recently began a test for a new feature that requires users to provide an extra step of authentication via a code sent to the primary phone number or email associated with an account.
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