Dawn Chmielewski & Tiyashi Datat

(Reuters) – Netflix Inc (NASDAQ) failed to reassure Wall Street about its plans to crack down on account sharing. The world’s biggest streaming video provider had found a way for new growth.

Netflix stock dropped 36% Wednesday in trading, just days after the company announced it will ask its subscribers to share their accounts with other people. The company blamed password sharing for not meeting its subscriber growth goals.

It was alarming to see the extent of shared accounts, which were estimated at 100,000,000 in total around the globe. This includes 30 million in Canada and the United States.

Michael Nathanson, a media analyst wrote that Netflix’s crackdown on password sharing is a sign it thinks it has “hit a wall.” With 221.6 million subscribers, Michael Nathanson said. Nathanson wrote, “Any company that has large out-year (revenue) targets and subscriber numbers should be more nervous today.”

Gregory Peters, chief operating officer of Netflix said Tuesday that there would be no stopping a Netflix customer sharing content with their sister. But we will require you to make a little more so she can share the content with us. We also earn the revenue that comes with the viewing.

Netflix has been testing the solution for over two years. Netflix introduced an extra charge to users from Peru, Chile and Costa Rica to allow them to share their accounts up to 2 people. Netflix announced on Tuesday it would introduce the password sharing charge globally within the next year.

Some analysts are skeptical.

“We don’t believe that this strategy will be the panacea that some investors have outlined over the last few years,” said Morningstar analyst Neil Macker. While Netflix may have the ability to extract a few dollars from some primary households, we believe that others will see the new sharing fees as an additional pricing hike and decide not to subscribe.”

Others laughed off the fact that Netflix had lost 200,000 subscribers in its initial quarter. They also predicted it would lose many more during the spring.

Manuel Muhl (an analyst at DZ Bank AG) stated that “it seems more like a excuse for the poor performances than anything else.” Password sharing is a known problem over the years. This cannot be used as an excuse for poor user growth.