I have been hearing a number of people shocked at Netflix for requiring this. Like that it is the most stupid idea possible, and will only cause Netflix to lose customers to attrition. That this is the kinda of stupid number pushing idea that upper management comes up with and implements.
Netflix might actually not have much of a choice here. If you share your Netflix password with people, they can consume content from say Universal. That means Universal won't get as much money from selling the rights to licence that content to someone like Amazon.
It's like a form of dumping. People are getting free streaming services, and that drives down the revenue for other streaming services, which by proxy brings down the revenue for the movie studio / TV stations.
Or you know, netflix is just getting greedy and wants Wall st to be happy.