Netflix's password crackdown doubled growth — measure what you accept

Netflix's password-sharing policy change in mid-2023 was controversial. Twelve months later, the company had added roughly 28 million net new subscribers — roughly double its pre-crackdown trajectory.

The lesson isn't about passwords. It's about the cost of things you tolerate.

For three years leading up to the change, Netflix's internal estimate was that roughly 100 million households were sharing passwords. Executives acknowledged this publicly and did nothing. The revenue recovery was obvious — the political cost of action was scarier than the cost of continued loss.

If your business tolerates something that's clearly costing revenue, the cost compounds. The action feels abrupt. The inaction was the real abruptness.