Netflix (NFLX) has increased the price of its service three years in a row. It’s latest 10-K was filed as its latest price hike— $1 for standard and $2 for premium— is being implemented. In its 2019 10-K, Netflix mentions price adjustments as a risk but not prominently:

“If consumers do not perceive our service offering to be of value, including if we introduce new or adjust existing features, adjust pricing or service offerings, or change the mix of content in a manner that is not favorably received by them, we may not be able to attract and retain members.”

In its 2020 10-K, Netflix prominently features price adjustment— and what it calls its overall pricing model— as a risk factor deserving of its own sentence:

“We may, from time to time, adjust our membership pricing or our pricing model itself, which may not be well-received by consumers, and which may result in existing members canceling our service or fewer new members joining our service.”

Though future price hikes wouldn’t come as a surprise, the change in language may indicate increased customer resistance to price increases amid the continued spike in competing streaming service options. Additionally, future price increases may not be received well by households that share accounts if Netflix strictly limits the practice.

Separately, investors have long wondered what the subscriber count might be if Netflix did not allow multiple users to share a single subscription account. They may soon get an answer. In its 2019 10-K, Netflix warns investors that its permissive account sharing policy may be abused:

“While we permit multiple users within the same household to share a single account for non-commercial purposes, if account sharing is abused, our ability to add new members may be hindered and our results of operations may be adversely impacted.”

In its 2020 10-K, Netflix signals efforts are underway to restrict abusive account sharing:

“ While we permit multiple users within the same household to share a single account for non-commercial purposes, if multi-household usage is abused or if our efforts to restrict multi-household usage are ineffective, our ability to add new members may be hindered and our results of operations may be adversely impacted.”

Netflix has addressed the issue on past earnings calls saying it was looking at friendly ways to reduce user password sharing. The recent spike in subscriber growth due to the global pandemic would likely be even more robust if not for password sharing.

If Netflix’s enforcement is perceived as overly harsh— and competing streaming services relax their account sharing restrictions to capitalize— expect pressure on Netflix to ease its enforcement activities. This may negatively impact the timing of Netflix’s aspirations of becoming consistently cash flow positive and launching a share repurchase program.

Regarding cash flow, it’s pertinent to note that Netflix has created a $250 million allowance due to a change in California law that caps business incentive tax credits at $5 million annually for the years 2020-22.