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Password Sharing Cuts Streaming Video Revenue

Streaming video companies are missing out on millions of dollars in revenue due to the prevalence of ‘password sharing’ according to a recent report.

21% of people aged 18-24 have used at least one video streaming account of someone they don’t live with according to a poll conducted by Reuters/Ipsos, allowing these individuals to access services like Netflix and Stan without the monthly subscription cost.

Other age groups also admitted to using someone else’s account, including 12% of those aged 25-34, while password sharing is less popular in older age groups.

Analysts and investors suggest Netflix and other streaming video companies may need to find a solution to password sharing if their growth slows in the future.

Netflix’s CFO David Wells has previously said that cracking down on password sharing “wouldn’t suddenly turn all those folks to paid users”.

All the major video streaming services currently limit the number of simultaneous streams allowed on a single account. The premium plans of both Netflix and Stan allow up to four devices to stream at the same time, while Foxtel Now allows 2 simultaneous streams.

In the future, companies could use technology that is able to detect when an account has unusual activity indicative of password sharing.

Research firm Parks Associates suggests streaming video companies will lose US$550 million from password sharing in 2019.



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