Password mooching is bad for Netflix, and maybe worse for Hulu and Amazon

27 Feb Password mooching is bad for Netflix, and maybe worse for Hulu and Amazon

The longstanding tradition of password sharing costs streaming services serious money according to a new survey by CordCutting.com.

The survey of 1,127 people ages 18 to 81 found that 15% of Netflix viewers mooch a login from someone else. That’s actually better than the percentages for Hulu and Amazon Prime Video, which had mooch rates of 19.2% and 16.5% respectively. Also worth noting: While parents were the most frequent source of shared passwords for Netflix (31.6%) and Amazon Prime (31.6%), significant others were the main source for Hulu (26.1%). Only 12.5% of Hulu moochers reported getting a password from their parents.

The survey also asked how many of those moochers would pay for their own subscription if they lost free access. For Netflix, 59.3% of respondents said they’d pay, which means Netflix could have an extra 14 million customers bringing in at least $112 million in monthly revenue if password sharing didn’t exist. Meanwhile, 37.8% of Hulu moochers said they’d pay, potentially bringing in 2 million customers and $16 million in monthly revenue. Amazon Prime moochers were the least willing to convert, with 27.6% saying they’d subscribe, adding up to 1 million people generating at least $9 million per month. That adds up to more than $1.64 billion per year in potential revenue between the three services.

Not that they can do much about it. Hulu already limits subscribers to one screen at a time for its on-demand service, while Amazon allows up to three device streams at a time, two of which can be watching the same video. Netflix allows one stream on its standard definition plan, two streams on its HD plan, and four streams on its 4K plan. Adding further limits would probably just anger legitimate customers.

Netflix CEO Reed Hastings, at least, doesn’t seem to be too worried in any event. “Password sharing is something you have to learn to live with,” he said in a 2016 earnings call, “because there’s so much legitimate password sharing, like you sharing with your spouse, with your kids … so there’s no bright line, and we’re doing fine as is.”

Source: Fast Company