There are more streaming networks than ever before, so If you have questions about the future of streaming, then you’ve come to the right place. All week long, IGN’s State of Streaming 2.0 initiative will feature reviews and in-depth analysis about new streaming providers like NBCUniversal’s Peacock, as well as a look at the coolest hidden features that streaming services are implementing and what the future of Netflix’s interactive space will look like. Today, we’re examining what kind of impact password sharing has on streaming providers, and if it could affect your ability to share in the future.
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With the rapidly growing list of new streaming services such as HBO Max and NBCUniversal’s Peacock competing for your cash, the idea of password sharing with your friends and family in order to save a few dollars doesn’t seem like such a bad idea… What’s the worst that can happen?
According to CNBC, “password sharing can be considered a violation of the U.S. Computer Fraud and Abuse Act, according to a July 2016 ruling by the U.S. Ninth Circuit Court of Appeals.” And while Netflix, Amazon, and Disney+ have yet to go around handing out $10 million-dollar lawsuits like the music industry did back in the Napster days in the early 2000s, times could be a-changing.
But how much much money do streaming services stand to lose due to password sharing, and how widespread is the practice? Below, we dig into streaming’s worst-kept secret.
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Password Sharing Is Costing Streaming Companies Billions
In a study conducted by CordCutting.com to find out how many people are “subscription mooching” from friends and family members, the site discovered that there are “more than 40 million ‘borrowed’ accounts across major streaming platforms.” And since many of those surveyed said they’d be willing to dish out their own cash if a friend cuts them off, that’s a potential revenue gain of $2.7 billion each year that streaming services are losing out on.
So far, streamers have been reluctant to aggressively punish individuals who share their passwords, but studio executives are aware that it’s a problem and might consider taking action down the road if things get out of hand. WarnerMedia CEO John Stankey addressed password sharing during HBO Max’s launch presentation back in 2019, saying, “I think the industry has an issue… I don’t think we’re going to get to a punitive environment [like the music industry], lawsuits being filed against folks, but I do believe the technology’s starting to get better to start paying attention to extensive abuse – when we see 14 locations logged into HBO on a Sunday night with 16 different streams going, we’re aware of those things. As growth taps out, I think the industry will come up with a method that’s a bit more rigorous.”
While it remains to be seen just how rigorous streaming providers are going to be about password sharing in the future, many of the top streamers already have protocols in place to prevent you from oversharing. Netflix, for example, uses its tiered-subscription plan, which costs $8.99 to allow viewing on one screen at a time, while at its highest tier of $15.99 per month, a subscriber can watch up to four screens at a time. Disney+ has a similar stance on the issue but at a much lower cost, allowing its users to watch on up to four screens at once for only $6.99 per month.
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In order to better understand and combat this dilemma, streaming providers are working with multimedia tech companies like Bitmovin, which have departments that specialize in tracking potential password sharing issues. “We hear [from clients] that it’s a problem impacting big chunks of the business,” Bitmovin Product Manager Christoph Prager told IGN. “We look at the number of concurrences per account. So how many users are streaming at the same time in a specific account. And then the other things that we are looking at are, ‘are they dispersed,’ sometimes tied to geography, which can be an indication that there is some password sharing going on. This can be regional dispersion or around different countries. Like within one account watching from the US, Brazil, and Europe at the same time, which is another good indicator.”
Prager went on to say that Bitmovin doesn’t offer any solutions for companies to deal with password sharing, but with so much potential profit left on the table, Stankey’s more rigorous method for cracking down the issue is probably closer than we realize. But what do our IGN staffers think of password sharing?
IGN’s Staffers Reveal Their Password Sharing Habits
For this portion of the story, we’ve decided to keep our staffers’ names anonymous, just in cast those rigorous methods come into play in the near future…
Password Sharing Story #1
“I subscribe to most of the major streaming services, along with Sling TV, and tend to share my accounts with multiple family members. As expensive as it is to keep up with all these services, I have zero qualms about trying to get the most out of my money. And in the case of something like Netflix, I’m specifically paying more money to get better video quality and more simultaneous streams. If the various companies want to institute protections against password sharing, that’s their prerogative, but until then I’ll keep sharing my accounts. The only streaming service I don’t share with others is Prime Video. Given that I have so many purchases and services tied to my Amazon account, I’m a lot more hesitant to share that login info with anyone.”
Password Sharing Story #2
“I’ve lived with my roommates for three years, but we’ve been friends for much longer. We all get along famously and spend a lot of time together watching movies and binging new series in our shared living room. I’d been living in the apartment for months and was aware that we were using a shared Netflix account, but whenever I used the TV, I just clicked the first available profile and watched whatever I wanted without giving much thought to it. It wasn’t until I started watching more niche stuff (anime, bad reality TV) that I thought, ‘Hmm, I’d better created my own account so I don’t mess with anyone’s recommendations.’ So I did. I used this profile on a shared account for a while when one day, as I logged in, I noticed the names of the other profiles on the account: Jim, Janet, Quinn, Kelly (my roommate), and me. None of these other names were familiar, who’s account had I been using?! It was in this moment of realization that Kelly walked in. ‘Who’s account is this?!’ I asked, ‘Who are these other people?’ She started laughing super hard. ‘That’s my parents’ account. They’ve been calling you their TV son for weeks.'”
Password Sharing Story #3
“My friends and I generally use a trade system. For example, I have a premium Hulu subscription, which I share in exchange for a Crunchyroll password, and also a Netflix password. But we never share our passwords with more than two people at a time. Before I shared passwords, I would only have one service activated each month anyway, which is why I don’t feel too guilty about it. I would rotate based on which shows I wanted to watch each month, and then make sure to watch everything I really wanted before switching over. This method was supplemented by Amazon Prime Video because I have a Prime account, so really Amazon Prime plus whatever was usually plenty. But it’s nice to have access to everything at once, even though my browsing time has gone up exponentially.”
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Password Sharing Poll Results and Twitter Comments Revealed!
Below, you’ll see the final results from our poll, which is surprisingly close when it comes to who shares passwords and who does not. Over 16,000 of you responded with 54.3% not opposed to sharing passwords, while 45.7% like to keep things private.
On Twitter, the results were a bit more varied with 66.8% of responders saying that they do share passwords, while 33.2% said they don’t. In the comments, it appears that many of you are in favor of sharing with friends and family. @ohalexsimmons says that he prefers to “trade ’em.”
@valkryie also shares her passwords, which is a good way to save money by splitting the bill.
Password Sharing Conclusion, Will Streaming Providers Crack Down in 2020?
As mentioned above, in Cordcutting.com’s survey the outlet discovered that the “four major streaming platforms” (Netflix, Prime Video, Hulu, and Disney+) could earn an additional $2.72 billion if each company started cracking down on password sharing. Here is how much each streaming provider is losing per year, according to the site:
- Netflix – $2,033,074,038
- Amazon Prime Video – $231,149,319
- Hulu – $214,651,518
- Disney+ – $240,770,410
Even with this staggering amount of cash lost due to password sharing, it doesn’t make sense for these billion-dollar companies to aggressively pursue the matter at this time. For Amazon, a company valued at over $1 trillion with the richest man in the world as its boss, haggling over a couple hundred million dollars doesn’t seem like the appropriate thing to do in 2020, especially with the ongoing COVID-19 pandemic causing job shortages around the globe. The same goes for Netflix, a company forecast to spend $17.3 billion in 2020 on original content alone.
But time will only tell what will happen in 2021 and beyond.
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David Griffin still watches DuckTales in his pajamas with a cereal bowl in hand. He’s also the TV Editor for IGN. Say hi on Twitter.
Source: IGN.com Password Sharing Is Costing Netflix and Others Billions in Potential Revenue