Password sharing costs US streamers $25 bn every year, report says

Password sharing costs US streamers $25 bn every year, report says

Netflix is losing about $6.2 billion annually


KOLKATA: Several reports suggested recently that Netflix is testing a feature to curb widespread password sharing. It makes sense for the streaming giant, as it is losing about $6.2 billion each year due to the prevailing trend of multiple unauthorised people using the same account. Overall, the issue has led to a loss of $25 billion for US streaming platforms.

According to media reports, Citi Global Markets analyst Jason Bazinet said in a note it is going to be an important issue for HBO Max, Disney+, Peacock, Spotify as well. “As streaming services move to center stage, thwarting this theft will be of growing importance for shareholders,” he wrote.

Research firm Magid recently said that Netflix could significantly increase its slow domestic subscription growth by cracking down on password sharing. It also added that 33 per cent of US SVoD subscribers share passwords.

Recently, another research note from Bank of America also said that a significant portion of users share their passwords with non-subscribers. Hence, an attempt to curb the practice will be definitely helpful.

“In our streaming survey, we asked a pool of Netflix subs if they shared the service with another household…and 26 per cent said they did, and 50 per cent of these said it was shared with family in multiple locations,” it added.

Last week, reports emerged that Netflix is in the process of trialling a crackdown on ineligible users who access the streamer's content through password sharing. Some users have reported seeing a screen saying, "If you don't live with the owner of this account, you need your own account to keep watching." Studies over the years have estimated that the number of password freeloaders on Netflix number in the millions.

"This test is designed to help ensure that people using Netflix accounts are authorised to do so," the BBC quoted a Netflix spokesperson as saying.