A survey of 19,000 U.S. adult consumers conducted by equity research firm MoffettNathanson suggests that 22% to 32% of the 30 million Americans who use someone else’s Netflix account will eventually subscribe to the streaming service.
A conversion of 25% of these consumers — a conservative outlook — would yield Netflix 6.8 million additional U.S. subscribers and $567 million in incremental annual revenue, the research company said.
"While this might not be the home run that the bulls believe, the near-term opportunity to continue adding subscribers in North America seems very likely," analyst Michael Nathanson wrote in a report published late last week.
Netflix, which reports third-quarter earnings Wednesday, already credited its password-sharing crackdown on a global scale for its addition of 5.89 million subscribers worldwide in the second quarter.
Partnerning with Publishers Clearing House, which has used its sweepstakes data to pivot into developing large consumer surveys, MoffettNathanson found that only 23% of U.S. Netflix password-sharers have been notified by Netflix that they’re in violation of policy. And of that group that's been notified, 72% have lost access to Netflix.
“This implies that Netflix has ample room to continue rolling out warnings and enforcement of this measure,” Nathanson wrote.
Among the password-sharing group that's been notified that they're in violation but who have not lost access to Netflix, 22% say they've established their own account or plan to. The number rises to 32% for those who have lost access to the streaming service.
Complicating matters for Netflix: According to the MoffettNathanson/PCH survey, 42% of password sharing occurs among parents and children. And it's mostly the kids who are the sharers at this point. This suggests Netflix has to navigate through some tricky family ties as it continues to progress through the ranks of unaddressed password-sharers.
