Chill, Netflix says
Streaming giant, others push end to password sharing
NEW YORK — Many of us were taught to share as kids. Now streaming services ranging from Netflix to Amazon to Disney+ want us to stop.
That’s the new edict from the giants of streaming media, who are hoping to discourage the common practice of sharing account passwords without alienating subscribers who’ve grown accustomed to the hack.
Password sharing is estimated to cost streaming services several billion dollars a year in lost revenue. That’s a small problem now for an industry that earns about $120 billion annually, but something it needs to address as spending on distinctive new programing skyrockets.
Amazon’s upcoming “Lord of the Rings” series will reportedly cost $450 million for its first season alone — more than four times the cost of a season of HBO’s “Game of Thrones.”
“Frankly the industry has been gravitating toward that. It’s a question of when, not if,” said CFRA analyst Tuna Amobi. “The landscape seems to be pretty set in terms of these new entrants, so it seems like a good time to get a much better handle on subscribers.”
It’s a tricky balance. The video companies have long offered legitimate ways for multiple people to use a service, by creating profiles or by offering tiers of service with different levels of screen sharing allowed.
Stricter password sharing rules might spur more people to bite the bullet and pay full price for their own subscription. But a too-tough clampdown could also alienate users and drive them away.
In March, some Netflix users began to get popups asking them to verify their account by entering a code sent via email or text, but also gave them the choice of verifying “later.” Netflix did not say how many people were part of the test or if it was only in the U.S. or elsewhere.
“They’ll be taking a very cautious approach to it,” Amobi said. “Handled the wrong way, there’s always a downside to a move like this.”.
Roughly 2 in 5 online adults have shared passwords to online accounts with friends or family members, according to the Pew Center for Internet and Technology. Another study found more than a quarter of all video streaming services are used by multiple households.
That includes a family or friend sharing the account they pay for outside of the household, or, less commonly, several households splitting the cost. And 16% of all households have at least one service that is fully paid for by someone else according to the study by Leichtman Research Group.