So while people here think they're doing this to their own detriment, their legion of scientists have already told them the end result which is obviously not detrimental or they wouldn't be doing it now.
And, as a scientist, you cannot build a model with a never-happened-before phenomena. Only "risk specialists", "risk engineers", etc. which are different names for BSers will even try to "predict" this.
How can one build a "model" with no x (password policing enforcement) and only y (stay or drop) is beyond me. If anyone does, I will show you an idiot/BSer.
I am sure this is a business decision. Or MLEs/Deep Learning Engineers are going beyond the capabilities of their fields.
Sure, you can predict if a user is going to drop if a show he was binging is going away or his watching pattern, time spent watching, etc. But to build models with password policing enforcement? Hah!
Trying to predict whether this decision is harmful in the long run is not in the realm of science, but of art, business, or bullshitting.
I don't know if NFLX did a smaller scale pilot study and tried to build a model, but that would be inadequate.
Note: Never worked for Netflix.
You can't make reasonable conclusions during transients. Wait until things have settled before judging if the move was smart or not.
When they tried this in other countries, they saw a dip and then growth. According to their statements, a dip is part of their model.