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Online Video Plagued by Password Sharing

How bad is the password-sharing epidemic for online video services like Netflix, Amazon Prime Video and Hulu? So bad that Charter CEO Tom Rutledge admits he heard from one content company that a single subscriber has been recorded as supporting 30,000 concurrent video streams. That's one video consumer sharing credentials in a way that allows friends, family or maybe complete strangers to watch 30,000 video streams at the same time.

There are plenty of reasons why the traditional pay-TV bundle is in decline. But by far, the hardest one to argue with is the fact that many consumers can get access to premium TV content for pennies on the dollar, or even for free.

Rutledge acknowledged at the UBS Global Media and Communications conference that when it comes to measuring the impact of password sharing, "by definition, nobody knows how bad it is." Anecdotally, however, evidence that the economic consequences are significant is beginning to mount. College students use their parents' credentials to access TV online. Recent graduates share passwords with friends so that everyone gets a discount on streaming services. And the number of millennials signing up for conventional pay-TV bundles is dropping.

At the recent TV of Tomorrow conference, recent MBA graduate Courtney Miller, who is also Associate Manager of Multicultural Marketing at Home Box Office Inc. (HBO) , talked about being tempted by the new online skinny bundle that Time Warner Cable Inc. (NYSE: TWC) is testing out in New York. A promotional deal has TWC giving away a free Roku box with the skinny bundle. Since Miller was already considering a Roku purchase, the deal was attractive. Ultimately, though, Miller decided Time Warner Cable's monthly fee was bound to increase in the future, and that it was a safer bet just to buy a new Roku outright.

Also, Miller readily admitted that she shares passwords for online video services with friends, so she already gets a lot of the content she wants cheaply anyway. It's not that Miller doesn't watch TV. Far from it. She stated clearly that she watches a lot of TV. It's that she doesn't want to pay a lot for good content, and so far, she hasn't had to. (See also FiOS TV Director Cuts the Cord.)


Want to know more about the impact of web services on the pay-TV sector? Check out our dedicated OTT services content channel here on Light Reading.


There is a solution to password sharing. As Charter Communications Inc. 's Rutledge pointed out, "It can be managed. You can manage how many streams and where they go, whether they're in the house or out of the house, what the behavior patterns of the streams are, how many of them are simultaneous, how many locations there are. And you can build algorithms to reduce the unauthorized usage."

The industry, however, has to take action across the board to measure and control where video streams are going. And today, programmers and distributors are all putting their content online in lots of different places, making it difficult to keep track of how consumers view it.

Ironically, if the pay-TV industry does figure out how put a rein on password sharing, it could help consumers in a number of ways. It could, for example, smooth the way for new competitive video services, like the one Apple Inc. (Nasdaq: AAPL) was considering but has now apparently abandoned. (See Apple Presses Pause on OTT TV – Reports.)

Until the industry does solve the password-sharing problem, however, programmers and distributors are going to continue to be skittish about how they develop and support online products. TV Everywhere? It won't really happen until everyone gets paid, and paid well to make it happen.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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kq4ym 12/21/2015 | 10:51:24 AM
Re: You can't lose what you never had We have to guess the providers just don't want to do anything about password sharing at the moment. After all, it's getting lots of extra viewers on board and increasing the value of the brand. At some point, it's a safe bet though that all those viewers watching for free will be offered a tempting offer to pay or lose service.
mhhf1ve 12/10/2015 | 12:59:39 PM
Re: You can't lose what you never had > it won't be long before we start hearing that password sharing is costing video service providers $X billion a year in lost revenue ...

I think we might hear this... if a simple solution didn't exist.. but it does.

I'm surprised we're hearing about password sharing at all. This is not a hard problem to minimize. A much harder problem is stopping PopcornTime and the like.
mendyk 12/10/2015 | 9:35:26 AM
You can't lose what you never had Another issue here -- it won't be long before we start hearing that password sharing is costing video service providers $X billion a year in lost revenue -- the assumption being that if freeloaders couldn't freeload, they'd willingly pay full price for the service they are now stealing. The world doesn't work that way, but it makes for good headlines.
Susan Fourtané 12/10/2015 | 6:10:47 AM
Re: Also.. people can invite friends over to their homes! Mhh, people don't usually have the same free time other people have to watch something together. That can happen every now and then only.
PaulERainford 12/10/2015 | 4:20:51 AM
Re: Sharing is caring It's sarcasm, without a tag.
mhhf1ve 12/9/2015 | 10:15:59 PM
Also.. people can invite friends over to their homes! So.. instead of sharing passwords, people can also just watch TV together as a group... 

I remember a lot of college dorms would gather crowds around a TV... but that was admittedly a long long time ago.
mhhf1ve 12/9/2015 | 10:13:53 PM
Re: How is this still a problem? I suppose someone generous could have posted his/her login and password on a "Bugmenot"-like site... and have 30,000 people sharing that account. But I still don't get how annoying it must be to try to use that account unless there aren't any IP-based restrictions on it AT ALL. And if that's the case, then it's like leaving a cash register open at a 7-11 and leaving a sign saying "please pay what you're suppose to" and going on an extended smoke break. That's not a "plague" of online video sharing.. that's just poor security.
Mitch Wagner 12/9/2015 | 7:20:55 PM
Re: How is this still a problem? mhhf1ve - Yes, I don't see how this is a problem. It should be easy to use IP addresses and caps on the number of simultaneous streams to throttle password-sharing. 
Mitch Wagner 12/9/2015 | 7:19:55 PM
Re: Sharing is caring Worse: It leads to dancing. 
Mitch Wagner 12/9/2015 | 7:19:22 PM
Re: How is this still a problem? 30,000 streams? "That's one video consumer sharing credentials in a way that allows friends, family or maybe complete strangers to watch 30,000 video streams at the same time." That's someone with a big family -- or lots of friends. 

 
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