Account Sharing is Rampant. But How Big of a Problem is it for Providers?

The sharing economy is alive and well in television – especially among younger viewers.  In December, Hub’s “Video: Redefined” study found that among viewers 18-24… 

• 75% have given a streaming password to someone outside their household (up from 54% in June 2018)
• 84% have used a password someone else shared with them (up from 59% in June 2018) 

Some estimates put the lost revenue for streaming companies in the billions of dollars.  So why haven’t providers cracked down harder? Here are three good reasons:

• “Wanting to watch” is not the same as “willing to pay”.  The average viewer now uses content from more than 4 different providers, and the volume of content those companies produce is bigger every year.  So, we can’t assume that everyone using a shared login would pay for a subscription if they had to – many, maybe most, would just find something else to watch.  
• An easy-going approach is good for the brand.  When people can’t access pay TV content outside their home network, they are annoyed at the cable company.  But when someone gets the “no streams available” alert from Netflix, they blame whichever of their friends logged in before them.  Strict policing might reduce the amount of account sharing. But it also creates an adversarial relationship with consumers in an environment where ease of use means everything.  
• Account sharing might be the most effective marketing tool available.  High profile, critically acclaimed originals are not the differentiator they once were – every streaming platform has at least one.  People using someone else’s login are not paying -- but they’re seeing and becoming invested in the content. The chances they will eventually pull out their credit card are much higher than if they had never watched at all.

The price of content is sky high and providers can’t afford to extract less than the maximum value from their investment.  But in a market that’s increasingly saturated with shows and providers, account sharing may have a bigger silver lining than many realize.