Survey shows 62% of Netflix password-sharing users would stop using service
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Netflix (NASDAQ:NFLX) is getting ready to implement charging for password-sharing between households and a survey conducted by Jefferies shows the change could have negative implications for the streaming giant.
Interviewing 380 "password borrowers," 62% of respondents to the investment firm's survey said they would stop using Netflix (NFLX) for a number of reasons, including 25% of that group who said they could not afford the service. Thirty-one percent said they did not like the content enough to pay for it, while 35% said they can replace Netflix (NFLX) with another service.
Analyst Andrew Uerkwitz, who has a buy rating and $425 per-share price target on Netflix (NFLX), also pointed out some other interesting takes from the survey, including 69% of those who said they could replace Netflix (NFLX) listed it among their top three favorite services.
Additionally, 32% said Netflix (NFLX) is where they go when they don't know what to watch and 24% said it would be the service they would least likely to give up. 
"Our estimates imply 21% retention of borrowers in 2023, growing to [approximately] 45% by end of 2024 - we feel good about this in light of a survey where 38% indicate immediate retention upon password-sharing crackdown," Uerkwitz wrote in a note to clients.
Other findings in the survey include that there were more than 700 people who did not have access Netflix (NFLX), but roughly 40% are least "somewhat interested" in the company's advertising-supported tier.
Nearly half of password borrowers, or 48%, said that they leave and come back to a streaming service at least once a year, up roughly 46% in the prior survey.
They survey also found that Hulu, owned by Walt Disney (DIS) and Comcast (CMCSA), is a more relevant competitor to Netflix (NFLX), while Google's (GOOG) (GOOGL) YouTube is seen as "well positioned" to be a beneficiary from a price war.
Netflix (NFLX) shares fell fractionally in premarket trading on Monday.
Last week, GM (GM) announced it is joining forces with Netflix (NFLX) to place its electric vehicles in relevant series and movies.