Will Costco be another Netflix?

A report from Morgan Stanley (MS) suggests that Costco is having a "Netflix moment," citing $Costco(COST)$ 's ongoing crackdown on "account sharing," as with $Netflix(NFLX)$

The crackdown on sharing is expected to convert 4 million previously unpaid members in North America and generate a 5 per cent uplift on 76 million users globally.

j On this basis, the measure is estimated to result in 8% membership growth and $0.54 EPS growth in the FY2025 base scenario, and 12% membership growth and $0.82 EPS growth in the bull scenario....

I think there are some similarities and differences to focus on.

Similarities:

1. Also targeting "card dabbling" sharing users, who tend to be price sensitive;

2. The company is also responding to growth pressures by suspending sharing behaviours that were previously of little concern.

Differences:

1. While Nifty has cracked down on shared accounts, it has also introduced low-priced membership packages that include advertising services to mitigate the potential churn of some extremely price-sensitive users;

2. While Nifty's purchases are recreationally optional, the goods purchased at Costco are often necessities.

3. Costco's membership costs are more likely to reduce the value for money of the membership service if they are spread evenly over the user's weekday purchases and thus losses.