As Amazon Copies the Netflix Playbook, Can AMZN Stock Copy the 425% Gains in NFLX?

Streaming companies like Netflix (NFLX) and Disney (DIS) have been cracking down on password sharing by their members. The move has paid dividends, at least for Netflix, whose subscriber count has surged over the last two years following the password sharing crackdown and the launch of a low-cost, ad-supported streaming tier.

Now, Amazon (AMZN) has joined ranks with other streamers and is doing a sharing crackdown of its own. In a notice sent to members, it said that it would end the Prime Invitee Program, which let subscribers share free shipping with others, on Oct. 1.  Amazon is offering users who were sharing Prime an annual membership for just $14.99 for one year. After one year, the price will rise to $14.99 per month or $139 annually, which is the same as the current cost.

The move comes shortly after a Reuters report pointed to slowing growth in U.S. Prime members heading into this year’s Prime Day and said that the growth was below last year and also missed the company’s internal forecasts.

The password-sharing crackdown did wonders for Netflix, as evidenced by its price action. NFLX stock has gained nearly 425% over the last three years, which is well ahead of the broader markets as well as Big Tech peers. For context, Amazon is up just under 70% over the period. In this article, we’ll discuss the implications of Amazon phasing out Prime free shipping sharing. 

AMZN Stock Has Been Trading Sideways

Since rebounding from its April lows, Amazon stock has largely been trading sideways. While the stock did slip following its Q2 2025 earnings release, it has recovered some ground. However, it is up just about 6% for the year, underperforming the S&P 500 Index ($SPX).

While a long-term bull, I have been on the sidelines when it comes to Amazon amid the lack of near-term catalysts. The Q2 earnings supported the thesis as it raised concerns over its enterprise-focused Amazon Web Services (AWS) losing market share. Notably, AWS is Amazon’s cash cow and accounts for a lion’s share of its operating income.

Streaming Is Key to Amazon Ecosystem 

Coming back to streaming, while the business is the proverbial bread and butter for pure-play streamers like Netflix, for Amazon, it is part of the broader ecosystem. While the company does get significant revenue from Prime subscriptions, it also acts as a funnel for its e-commerce business.

Prime members get extra discounts and no-cost shipping, and are more hooked to its ecosystem than other members who are more likely to be lured by competitors. Prime members tend to spend a lot more than an average non-Prime member. According to Consumer Intelligence Research Partners, on average, Prime members in the U.S. spent $1,170 with Amazon last year, while the corresponding number for non-Prime members was $570.

Amazon Is Cracking Down on Paid Sharing

Amazon was late to the “sharing crackdown party” for a reason, as Prime shipping helped fuel sales at its e-commerce business. Amazon has denied that Prime growth in the U.S. slowed down this year and, in its statement to Reuters, said, “Prime membership continues to show strong growth and customer engagement in the U.S. and internationally.” However, the crackdown on Prime sharing comes shortly after the Reuters report talked about slowing growth in Prime members. Incidentally, Netflix also went after password sharing after losing subscribers in the first half of 2022. 

I believe the sharing crackdown is a logical step for Amazon and is in accordance with where the streaming industry is headed. When the streaming industry was growing at a faster rate, companies were willing to overlook the sharing part, as it only got more users hooked to their content. As the Netflix experience shows, while there can be some cancellations initially in response to the crackdown, the subscriber base eventually grows.  We might see something similar with Amazon, and the crackdown should help it add more Prime members.

Should You Buy Amazon Stock?

While I don’t expect the Prime sharing crackdown to be as big a driver for Amazon as it was for Netflix, it is an incremental positive and should help buoy the subscription revenues. More subscribers are also a positive for Amazon’s advertisement business, which is among its fastest-growing segments.

Meanwhile, Amazon is facing some serious competitive pressure. In the e-commerce business, Walmart (WMT) capitalized on its wide store network to counter Amazon’s competitive strength in logistics. In cloud, while AWS is still the market leader, it has been ceding ground to competitors. For instance, Microsoft (MSFT) Azure and Google (GOOG) GOOGL) Cloud – the top two cloud players in that order, after Amazon – reported 39% and 32% yearly revenue growth, respectively, in the June quarter, while the corresponding number was 17.5% for AWS.

Overall, the Prime shipping crackdown does not materially alter my investment case for Amazon, and I would wait for a better price to add more shares, especially amid signs of a slowdown in the U.S. economy.