Password pirates invade
30K simultaneous streams from 1 cable account
On Twitter, they are openly bartered, donated, even celebrated.
“Anyone have a Spectrum user ID & password I can trade for?” one Twitter user wrote last month.
Another thanked her friend “for giving me his Spectrum username and password to watch the World Series Game 7.”
A third tweeted: “Totally figured out my parents Spectrum password and can watch cable now through my Apple TV. I literally love my life.”
Tom Rutledge has had enough. The chief executive officer of Charter Communications, which sells cable TV under the Spectrum name, is leading an industrywide effort to crack down on password sharing.
It’s a growing problem that could cost pay-TV companies millions of subscribers — and billions of dollars in revenue — when they can least afford it.
“There’s lots of extra streams, there’s lots of extra passwords, there’s lots of people who could get free service,” Rutledge said at an industry conference this month. The CEO has said that one unidentified channel owner had 30,000 simultaneous streams from a single account.
Charter, which operates in New York, isn’t the only company tackling the issue. Researchers at Disney’s ESPN network recently asked a group of about 50 millennial sports fans how many of them shared passwords.
Everyone raised their hand, said Justin Connolly, executive vice president for affiliate sales and marketing for ESPN.
“It’s piracy,” Connolly said. “It’s people consuming something they haven’t paid for. The more the practice is viewed with a shrug, the more it creates a dynamic where people believe it’s acceptable. And it’s not.”
Cable and satellite carriers in North America have lost 3 million customers this year alone. But the prevalence of password sharing suggests many of those customers, and possibly many more, are watching popular shows like “The Walking Dead” for free, robbing pay-TV providers and programmers of paying subscribers and advertising dollars.
Most pay-TV companies only require users to re-enter their passwords for each device once a year. During contract negotiations this fall, Charter urged Viacom, home of Comedy Central and MTV, to help limit illicit password swapping. The cable company wants programmers to restrict the number of concurrent streams on their apps and force legitimate subscribers to log in more often, according to sources.
ESPN, meanwhile, has reduced the number of simultaneous streams that it allows on its app from 10 to five and is considering cutting that to three, Connolly said.
The problem stems from an industry concept called TV Everywhere. Started in 2009, the idea was an attempt to appeal to young consumers by letting them access cable or satellite shows on any device. TV Everywhere was slow to catch on but is gaining popularity as more people get used to streaming on phones or tablets.
About one-third of internet users stream cable TV without paying for it by using credentials of someone they don’t live with, according to Parks Associates. The TV industry’s losses from password sharing are expected to rise to $9.9 billion by 2021 from $3.5 billion this year, the research firm estimates. That lost revenue is especially important because the pay-TV industry is already losing subscribers to cheaper online rivals like Netflix.