March 14, 2025
Last week, after a warning from analysts at MoffettNathanson, shares in the streaming giant fell back by 8.5 per cent. The record profits that Netflix was able to achieve after the introduction of the passwords sharing ban are probably over. Being active in a tough market pays off. Netflix's crackdown on password sharing proved to be a major success in getting more people to subscribe to its streaming service worldwide.
It appears that this trend may have been temporary, as the increase in subscribers is now expected to slow down after the benefits of reducing the number of users buying new subscriptions have naturally evolved. Robert Fishman, an analyst with MoffettNathanson Research, wrote in a March 6 report, that Netflix is likely to have a few more quarters of strong subscriber growth driven by its content slate and advertising layer, but we expect the benefits of the password-sharing crackdown to slow.
This analysis, published last week, was followed by Netflix shares falling $84.56, or 8.5%, to close at $906.36 on the day. This is quite significant because Netflix stopped reporting quarterly subscriber numbers at the beginning of 2025 to focus on revenue and profit growth, so any future decline in subscriber growth will be difficult to measure.
Sport has become a major source of revenue and subscribers for Netflix. In the fourth quarter of 2024, the NFL and a record-breaking boxing match between Mike Tyson and Jake Paul helped Netflix add 19 million subscribers, a new record for the company, beating even the COVID-era highs.
The MoffettNathanson report argues that fewer people using someone else's credentials and paying for their own accounts has benefits, but that doesn't include Netflix signing up large numbers of new customers. Analysts suggest that the high level of global growth in Netflix subscribers does not represent such a significant increase in the user base, but rather the fact that Netflix is very effective at improving the monetization of its existing customer base.
Netflix doesn't think one-dimensionally. At the same time, Netflix's future revenue growth could come after the platform announces its first price increase in two years. This will probably include an increase in the price of its ad-supported tier, especially if the streaming giant continues to expand its advertising business.
Netflix is truly a leader and a major player on the streaming services market. Everyone is watching their business moves, trying not to be left behind and looking for ways to compete with them. We can clearly see that they have innovative ideas and are constantly working to stay on top. They know that nothing is guaranteed, so lack of commitment is not an option.
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