Commentary

Is Password Sharing Of Streaming Video Good Or Bad For The Industry?

TV piracy, for all its downside, also denotes a mark of desirability.

HBO’s “Game of Thrones” continues to be the No.1-pirated TV show worldwide. While that means lost revenue for HBO, it also places a patina of higher value for “Thrones,” as well as other HBO programs.

Somewhat in the same vein, password sharing has a price, and some marketing value, as well.

New research says as many as one in five people are using someone else's digital video account password to stream video -- Netflix, Hulu or Amazon, according to a new study of 1,127 people from CordCutting.com.

What's the most shared digital video platform, in terms of duration? Netflix, which tends to be used in password sharing for 26 months on average. Amazon is at 16 months and Hulu at 11 months.

This means Netflix could be losing $2.3 billion because of the practice. Amazon is giving up $540 million, while Hulu is losing $480 million, per the research. Sounds like big money.

Are those the only networks/OTT platforms affected? Can CBS, NBC or ABC make a case with any of their digital platforms?

Seems consumer laziness might be an issue. Netflix, Hulu, and Amazon costs just around $10 to $12 a month, with easy website cancellation and sign up.

This wouldn’t seem too expensive for consumers who might also pay much more, around $100 a month for traditional pay TV service -- cable, satellite and telco -- as well as related monthly entertainment digital services, such as Spotify.  

Cordcutting.com says children of parents who have streaming accounts on Netflix and Amazon are the most active when it comes to password sharing. For Hulu, it’s one’s “significant other.”

Synamedia says it has some new software that can identify when users are sharing their passwords for various streaming services. Right now, it doesn’t appear password and account sharing is illegal.  

In fact, in the past, Netflix has encouraged it. “We love people sharing Netflix,” Reed Hastings, CEO, Netflix, said in 2017. “That’s a positive thing, not a negative thing.”

Maybe Netflix believes at some point it can convert these people to longtime subscribers, using the password-sharing activity as a marketing tool. That said, it surely doesn’t want to lose millions of dollars. Maybe the activity is more modest -- and perhaps a positive?

So ask the question as a broader issue causing current media disruption in other areas: Are there lessons traditional cable, satellite and telco executives can learn from this as subscriber numbers decline?

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