January 8, 2020 11:45 am

Solutions to streaming services’ billions in losses from password sharing

Solutions to streaming services billions in losses from password sharing
Credit: Santeri Viinamäki (via Wikimedia Commons)

Streaming services lost a whopping $9.1 billion to password sharing piracy this past year, so what solutions are there to this problem?

The Hollywood Reporter reported the information from research firm Parks Associates, which paints a pretty grim picture when it comes to streaming services trying to get out of the red.

We all love to mooch off of our friends and families when it comes to streaming services. Unfortunately, it may be time to end that seemingly innocent act. The streamers will never reach their maximum potential otherwise.


This absolutely viral tweet from Netflix India epitomized the password-sharing epidemic:

It’s a joke that obviously lands. On the other hand, streaming services are spending so much money on original programming and content acquisitions. With such losses on password sharing, is that sustainable?

Streamers need that individual subscription money to continue funding their ambitious plans to revolutionize home entertainment.

So, what are some possible solutions — other than simply raising the price point for each streaming service?


CHECK OUT: Netflix spending 6 times more on content than Disney+

Stand pat, do nothing

It was recently reported that consumers will spend $24.1 billion on video streaming services in 2020. This should only escalate the Streaming Wars arms race for content.

However, the revenue upside is far greater for the creators of all this home entertainment based on recent numbers.

Netflix hasn’t been shy about spending massive amounts of money, trusting the streaming revolution would offset the costs eventually. But the company’s debt would be far less if passwords haring weren’t so rampant.


The fact that the company itself can make light of the situation is good, yet yours truly couldn’t help feeling a pang of guilt about it.

Oh well, plenty of millennials are still on their parents’ cell phone plans. Same sort of deal, right? Well, not really. Those service providers have been in the midst of the smartphone movement for years. This streaming situation is a whole new ballgame for entertainment.

Park Associates projects the streaming services’ deficit from password sharing to rise to $12.4 billion in 2024. So, let’s look at a couple possible ways to proactively combat the issue.

CHECK OUT: HBO Max 2025 target profit date highlights streaming wars risk

Device limitations

Netflix currently allows streaming on up to six registered devices. That’s far too lenient.

Limiting streaming capacity to half that, three devices, means one subscriber can have their TV, smartphone and computer to stream on. That should be plenty. That subscriber must sign in to each device and register it.

All the other streamers should follow suit in this vein. Each individual device must be registered and accounted for with the account.

If the password is given to another person, they’ll simply be locked out, unless they’re using one of the original subscriber’s three devices.

CHECK OUT: Disney+ accounts hacked and sold in 1st week post-launch

Decreased browsing access

This would have to be somewhat in tandem with the strict three-device rule.

Say someone else tries to access the original subscriber’s account on a different device. OK, let them sign in, but significantly limit the availability of content.

Maybe it’s limited only to original programming from whichever streaming platform they’re on. That way, they can get a sense of what that service specifically has to offer.

These aren’t foolproof solutions. Maybe there’s a way to incentivize password sharers or stealers to break their union. Until a singular solution is presented, though, it’ll keep being many billions of dollars in losses.

Innovative, gigantic companies of Netflix, Amazon, Apple, WarnerMedia, NBC and Disney headline streaming. They’ll probably figure something out.

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