Why Does Everyone Else Want To Stop Netflix Password Sharing, When Netflix Is Fine With It?
from the silly-people dept
I’m not quite sure why everyone is so obsessed about the “problem” of Netflix password sharing, even though Netflix itself is fine with it. For a few years now, we’ve noted that Charter Spectrum’s CEO Tom Rutledge never misses an opportunity to scream about how awful it is that HBO and Netflix have to deal with people sharing passwords, even though the CEOs of both companies have made it clear that they’re fine with it as it tends to act as free promotion to get people to sign up for their own accounts over time. Here’s HBO CEO Richard Plepler from a few years ago:
“It?s not that we?re unmindful of it, it just has no impact on the business,? HBO CEO Richard Plepler said. It is, in many ways, a ?terrific marketing vehicle for the next generation of viewers,? he said, noting that it could potentially lead to more subscribers in the future. ?We?re in the business of creating addicts,? he said.
And here’s Netflix CEO Reed Hastings at CES three years ago:
“We love people sharing Netflix,” CEO Reed Hastings said Wednesday at the Consumer Electronics Show here in Las Vegas. “That’s a positive thing, not a negative thing.”…A lot of the time, he said, household sharing leads to new customers because kids subscribe on their own as they start to earn income.
Given that, you’d think that (1) a company would think twice about using CES this year to declare that it had a “solution” to the “problem” of Netflix password sharing, and (2) that press outlets like The Independent and Slashdot wouldn’t just repeat that company’s talking points.
Basically, some company claims it has an AI solution that can “detect” when someone is likely password sharing. To be honest, it’s probably not “AI” so much as “oh look, this person is logging in from different IP addresses that appear to be in different locations too closely together” which pretty much anyone — including the programmers at Netflix and HBO — could code up in a weekend or so if they wanted to.
Incredibly, the Independent piece repeats claims of “losses” from password sharing that are complete bunk:
Separate figures from research firm Parks Associates predicts that by $9.9 billion of pay-TV revenues and $1.2 billion of revenue from subscription-based streaming services will be lost to credential sharing each year.
Except, that assumes that everyone using a shared password would otherwise buy, which is ludicrous. And, again, the companies whose actual existence depends on this, both insist that it’s not having any impact, other than acting as free marketing for them to later sign people up long term. Incredibly, the reporter at the Independent includes that bogus “study” and other quotes about how password sharing is “too expensive to ignore,” but doesn’t bother to check to see HBO or Netflix’s opinion of whether or not this is actually a problem.
It really is a shame that so many people automatically default to the idea that people sharing access to content must automatically be “a problem” that must be “stopped.” The companies who dominate this space don’t see it as a problem, and just because some company’s PR team got the ear of a reporter, that doesn’t change reality.
Filed Under: password sharing, streaming
Companies: hbo, netflix
Comments on “Why Does Everyone Else Want To Stop Netflix Password Sharing, When Netflix Is Fine With It?”
Is that a rhetorical question?
They see it as a problem for a mix of three reasons I suspect, projection, having fallen for an oft-repeated lie about who owes what and when, and trying to undermine the competition
1) Short-sighted greed on their part means they’d never allow multiple people to use the same account for anything they offered, and as such they doggedly assume and insist that it must be a problem when it happens to someone else.
2) The oft repeated yet no less ridiculous for it idea that if you’re not paying for the content you experience you simply must be stealing it or otherwise doing something wrong. You’re watching a show and you’re not paying for it? Well, clearly that is a heinous crime, you’re getting something without giving anything right at that moment, and that simply will not do.
3) Password sharing makes Netflix/HBO more valuable, which draws in more people, which means people are less likely to spend more money on other services like theirs.
Re: Is that a rhetorical question?
I think you are being generous in assuming those who push against password sharing actually have fallen for their own rhetoric..
More likely they don’t actually think it’s stealing at all and they know perfectly well that it is good business for netflix and hbo, but admitting it would be harmful to the narrative they have been using to get them great stuff like the DMCA to tilt the playing field in their favour and help them survive longer.
Re: Is that a rhetorical question?
AND..
If everyone had separate accounts they could Track the movies you are watching…
Send you more adverts, focus advert specifically to you..
ROKU does this..you can get Local adverts..played 3-4 times in 1 break.. At twice the volume levels..
“To be honest, it’s probably not “AI” so much as “oh look, this person is logging in from different IP addresses that appear to be in different locations too closely together” which pretty much anyone — including the programmers at Netflix and HBO — could code up in a weekend or so if they wanted to.”
Also, it’s worth noting that the data provided is useless without context, given that these services are not tied to a location or a device. I logged in from another location, so what? Am I password sharing, or am I just logging into the service I’m paying for on the road while whoever lives with me is using it at the same time? You can’t possibly know.
The end result of this kind of crap would only ever be the same as DRM on purchases – useless at what it’s supposedly designed to do, but a great cause of problems for legitimate users. It would likely be trivial to bypass as well, depending on what data it actually uses.
Re: Re:
Your example is exactly the password sharing that some people are freaking out about. According to these people the person who stayed home should be using their own account to watch on while you are away. This is also a great reason why Netflix and HBO aren’t caring what these people think. Rather than maximizing current revenue they are maximizing convenience and customer satisfaction as that leads to long term revenue.
Re: Re: Re:
“According to these people the person who stayed home should be using their own account to watch on while you are away. “
Exactly, which means they are living in fantasy land. No household is going to pay subscriptions for every individual family member.
This is their MO – they would rather chase fairy tales than service the actual needs of their customers. Netflix got to where they are by understanding reality.
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My cable company used to charge a monthly per-TV fee, officially. We just went and bought a few splitters of course… but those were the pre-digital days, before you needed a cable box everywhere. They’re getting their pound of flesh now, from the people who still haven’t canceled. It may surprise you what people are willing to pay for TV.
Re: Re: Re:2 Re:
“It may surprise you what people are willing to pay for TV.”
Some people, maybe. The majority will either do without or pirate rather than pay for 4 subscriptions for the 4 people in their home. People are generally getting used to pay less, not more, especially those who are cord cutting to avoid being fleeced by the traditional services.
They will still have their place, but I believe their willing customer base is shrinking rapidly..
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Almost every service level offered by netflix provides multiple simultanious streams. They made clear limitations on the number of simultaneous streams Years ago, but they explicitly allow multiple streams depending on service level. So if this company is freaking out about 2 people in the same household using netflix at the same or similar times, they are actually calling for netflix to not provide service advertised.
Re: Re:
“To be honest, it’s probably not “AI” so much as “oh look, this person is logging in from different IP addresses that appear to be in different locations too closely together” which pretty much anyone — including the programmers at Netflix and HBO — could code up in a weekend or so if they wanted to.”
And how does that cover the 4 simultaneous streams where I’m watching on my phone while I take the bus home from work, my wife is watching at home on the TV, and the kids, one at a shop, the other at a friend’s place are all watching different shows at the same time on a family account? Netflix has that, you know.
If only one person at a time can watch streamed content, then obviously that greatly impinges on the usefulness of having a shared account, and most “illegal” Netflix account sharers who use the service frequently are therefore going to want their own account eventually. Then it’s basically no different from the scores of companies that offer a free service that’s restricted in some way, alongside their “premium” unrestricted paid service.
While there is no “industry standard” per se, the general expectation is that for each paying customer there will be two additional piggybackers.
Netflix could wind up facing antitrust issues but Hulu should take care of that as it continues to grow. Also these services already give month-long free trials that allow people to scoop up content if they’re looking to save money.
Being a long time pirate I am shocked how much streaming services have impacted the high seas.
Once upon a time the oceans teamed with booty, you could walk 5 leagues across the seeders… but now? Heck, it’s easier and faster just to use netflix!
"Fine" with it...
Some things has changed in 3 years since Hastings statement.
Netflix ARE looking for password sharers, but not very hard – they just go after the blatant ones due to pressure from investors that are concerned with sustaining the revenue growth (which is stupid but altogether another matter).
Re: "Fine" with it...
It’s the same as their “crackdown” on VPNs – Netflix didn’t give a crap but bowed to some pressure from the legacy industry to keep licensing deals open. There, the real fix is to clean up licensing so that they’re not such a massive gulf between countries in terms of the amount and quality of content that can be accessed, not to shut down paying customers who are trying to get the best deal.
Same here – they’re convinced that stopping people from password sharing will magically multiply the number of paying subscribers, but all it will do in reality is reduce the number of viewers. If Netflix cave, they’re just making life more difficult for the people who do pay, which is why they never do it themselves unless forced.
Its also probably the annoyance factor. If you start blocking people because they are “password sharing” when they are not you will have pissed off customers.
Re: Re:
Not sure if pissed off customers in this setting is a problem. Look at Comcast. You can’t swing a dead cat without hitting one of their customers who’s frustrated, angry or flat out irate. And yet they have $84 BILLION in revenue, $187 BILLION in assets, 164,000 employees, and 22.1 million customers.
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The difference is that Comcast enjoys a regional monopoly; Netflix actually has competitors within the same market.
With Comcast, you often have to choose between crappy, overpriced Internet service or no service at all. If you leave Netflix, you have Amazon Prime, Hulu, CBS All-Access, HBO Go, Disney’s new streaming service…
Not all of these allow password sharing, but that’s the point. The fact that Netflix does is a selling point for people trying to choose which streaming service(s) to subscribe to.
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As both a Netflix and Comcast subscriber. Love netflix and willing to pay for it. Hate Comcast but my only other choice is DSL(CenturyLink) and they actually have a worse rep then Comcast. Also their highest speed plan is only 1/50th the speed of basic Comcast. They are 20% cheaper but couldn’t accept that much of a speed loss.
electronic media is not widgets
It is amazing how many people in the business of sharing electronic media still think of it in terms of exchanging physical goods. All they are doing is sharing bits, and they feel a need to control numbers. Scarcity in this context is artificial, and they cannot wrap their heads around the idea that the supply curve is different, and they cannot shift and control it.
Re: electronic media is not widgets
[citation needed]
While this may be true to some extent for the music industry the audiovisual industry has been distributing their content in essentially the same way for a very long time. Surely they don’t think of their product as physical goods.
It’s more likely they’re all just greedy bastards.
Re: Re: electronic media is not widgets
You sure about that? All the legacy players talk is full of terms like theft, freebooting, buggery, and piracy. So they seem to be stuck not just in the 90’s, but the 1690’s.
Maybe the first tap on the nose with the clue stick is that the Netflix app allows for multiple profiles to be set up under the same account. Every time I turn it on, it asks me who am I, so it uses the right preferences, recommendations and history.
Besides, I pay for Netflix streaming on multiple concurrent devices (not bad for somebody who used to share an account with somebody), so this “AI” can bugger off and pound sand. It doesn’t speak for me.
Re: Re:
“I pay for Netflix streaming on multiple concurrent devices”
This is the part that needs smashing into these thick skulls. People are PAYING Netflix for streaming to 1, 2 or 4 devices. Whether they personally own those devices or they are letting other people use the service when they’re not using it themselves should be as irrelevant as how many people you intend to feed with that pizza.
There is no way to address this “problem” without making the service far less worth paying for in the first place.
Re: Re: 'Now that you're not paying Netflix, how about you pay us?'
There is no way to address this "problem" without making the service far less worth paying for in the first place.
I suspect for a few of the ones pushing the ‘password sharing is a serious problem!’ idiocy that that would fall under the ‘that’s a feature, not a bug’ category.
Re: Re: Re: 'Now that you're not paying Netflix, how about you pay us?'
Yes, they find a competitor that’s giving them trouble, “discover” a “problem” that said competitor isn’t dealing with, and pressure politicians to outlaw the “problem”. Competition dealt with.
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Only 2 or 4 devices? No kids huh? 🙂
I use my folks netflix, they use my prime – if they blocked this they’d lose both of us.
Problems
I remember an article about something along these lines that the algorithm was trying to determine what family members or household were authorized. It would lock out users if it decided they were not geographically close enough. All it took was a simple call to the service to “clear things up” when the account got locked.
I can’t imagine Netflix doing something like that – for one, it would mean they’d need to have customer service reps. If my account is locked for 18 hours while I wait for their email support I’m just going to cancel the service.
Re: Problems
I used to frequently watch Netflix from my hotel when I traveled on business. My family could potentially be watching at home at the same time, thousands of miles away. when travelling outside of the US, I would need to be on VPN to watch certain content on Netflix. A handful of extended family members have our account on their smart TVs, but it is rarely running unless we are visiting.
Considering the (in)accuracy of IP geolocation, this would be a regular minefield – and this is just one account.
I currently have Netflix, Prime and HBO Now and if they start pulling stupid crap to limit my access, I guarantee I will look elsewhere. I’m not calling support to unlock my account, I’d be calling to cancel.
Re: Re: Problems
Yep, same here. I work in a different country to where I live and depending on what’s going on it’s not uncommon for members of my household to be watching in 3 different countries at the same time. It’s bad enough that thanks to the VPN fuckery I now sometimes can’t finish watching the movie I started on my lunch break when I get home, but trying to fleece money out of me because I’m trying to watch it work when someone else is using it at home wouldn’t fly.
I understand that a lot of cases like this are very much not the norm, but there’s plenty of legitimate uses that could fall foul of this kind of thing that would not make more money for the industry if prevented – and that would be assuming that the data they’re using is completely accurate (which you rightly note it is not).
The price is not per password
The streaming services have their price point calculated per stream, not per password/login. It doesn’t matter one bit to them if I share my password with no one, or 100 people. I can only get 1, 2, 3, X, concurrent streams.
Why third party ‘think tanks’ or services is worrying about this ‘problem’ is the real question.
The pretense is NOT in the caring but in the reason.
Tom Rutledge screams against sharing exactly because Richard Plepler and Reed Hastings won’t. It’s much harder for Tommy-me-boyo-Rutledge to lure people to Spectrum, if his competitors happily allow “sharing.”
“We’re in the business of creating addicts,”
That’s the part the traditional telco executives do not get. They didn’t need addicts. They were selling water on the only pipe to the house. People had no other options if they wanted cable service.
charter spectrum and ai lapdogs
I don’t think it’s difficult to figure out why companies like charter spectrum are getting their knickers in a snit. What happens to them if companies that are not customer abusive gain a foothold? I rest case number 1.
Why are the pseudo ai geeks trying to solve this non-problem? For the same reason the gee whiz people solve lots of other non-problems (e.g., the Internet of Broken Things) What coffee making problem needed to be solved with an internet connecteed coffee maker that collects data or Alexa? (Seriously, is the world better off because people can be induced to buy fidget spinners on impulse while Amazon scoops up conversations and anything else it can? What problem did Alexa solve?)
Solving a real problem is harder. It takes longer and generally lacks the sparkle that attracts venture capitalists like flies to shit. I rest case number 2.
Securiy Problems.
If a said ISP can actually tell that there is password sharing going on then there is a BIG security problem with the authentication and logon process that Netflix uses. This should all be done in such a way that ISP can’t tell what account ID’s and passwords are being used. Only Netflix should/would know who is logged in and from which IP addresses.
Imaginary lossess as usual. Netflix already charges you for the amount of concurrent users that can stream at the same time under a single account with a Max of 4. So I for example can watch my movie while the wife watches her dramas and my kids watch their cartoons/anime shows. If someone else tries to log on to my account one of us will get disconnected so the issue is non existent.
Now If I’m at the doctor or somewhere else bored and Netflix decides to prevent me from using my account just in case I’m sharing my account because I’m logging from a different IP or location and some algorithm flagged me for it… they can bet their greddy little hands that pirated streams will start looking mighty attractive again. If they dont want to experience real losses they better not follow the advice from quacks looking for a slice of the profit pie nor the mentality of legacy cable companies that coming up with creative pricing schemes to annoy the customer until they cut the cord.
This author is being disingenuous
How does this line make any sense to anyone:
“press outlets like The Independent and Slashdot wouldn’t just repeat that company’s talking points.”
Slashdot is an aggregator and comment site, like Reddit. The linked Slashdot “article” is commentary on The Independent article.
So basically a single source (The Independent) wrote a bullshit article, which was shared on aggregator sites, and this is worthy of a whole Techdirt article?
Slow news day, Mike?
“It really is a shame that so many people automatically default to the idea that people sharing access to content must automatically be “a problem” that must be “stopped.” “
By “so many people” you mean that one guy at CES?
Re: This author is being disingenuous
????
Re: Re: This author is being disingenuous
Did you reallyhave to change up addresses to thumbs up yourself bro?
Re: Re: Re: This author is being disingenuous
You have me confused with someone else.
Re: Re: Re:2 This author is being disingenuous
Sure I do ????
Re: Re: Re:3 This author is being disingenuous
Sure he does ????
Re: This author is being disingenuous
“So basically a single source (The Independent) wrote a bullshit article, which was shared on aggregator sites, and this is worthy of a whole Techdirt article?”
You’re on a blog that explicitly states that it is more interested in debate surrounding issues than it is about breaking news. You’re free to explain why you object to the primary source but if you’re complaining that this is not the primary, you’ve lost the argument already.
Re: This author is being disingenuous
Slashdot is an aggregator and comment site, like Reddit. The linked Slashdot "article" is commentary on The Independent article.
Yes, but they have editors who choose what is worthy to post. And them reposting the nonsense from the Independent deserves being called out.
Slow news day, Mike?
Any time someone says that line, I know that they are an idiot.
It is never a slow news day. It has never been a slow news day. We write about what we want and what we think is interesting. You are free to disagree but saying "slow news day?" brands you as an idiot who knows fuck-all about news.
By "so many people" you mean that one guy at CES?
No. I mean, multiple reporters, the CEO of a large cable company, enough people to fund/create a company designed to deal with this "problem" and people who then go and share this story on Slashdot and elsewhere on social media.
Seems like significantly more than "one guy at CES."
Re: Re: This author is being disingenuous
Re: Re: Re: This author is being disingenuous
This is the place where you make your comment.
Like:” I’m happy I’m not the guy who just got his ass handed to him and switched IP addresses in a weak attempt to shore up support for himself.”
“Every pirated copy of a game is a lost sale!”
Q4 report now out: Netflix burning $15 million a day.
Also raised prices this week…
So answer to ya, Masnick, is that everyone who doesn’t believe that cash burn can go on forever is worrying that Netflix must somehow taper off the foolish promises made in the past.
Only reason Netflix hasn’t collapsed 5 years ago is the “free money” era of the Fed printing $1 trillion a year. Its “business model” doesn’t work at current pricing / “sharing”.
They tried to gain market share but it’s catching up to them way does to all internet distribution: unlike broadcasting increasing subscribers cause increasing costs.
The only business model that can work is everyone pays directly. This password sharing will soon end.
Re: Show me the money
Let’s put some money on that last sentence bro. Although knowing you history you’d welsh out on the bet.
Re: Q4 report now out: Netflix burning $15 million a day.
…and?
I haven’t seen a full report recently, but I know that Paramount (Viacom) posted 2018 losses of over $250 million, and that was a marked improvement on the previous year.
Why aren’t you in here braying about them going under?
“Only reason Netflix hasn’t collapsed 5 years ago is the “free money” era of the Fed printing $1 trillion a year”
I’ll need a citation for that.
“Its “business model” doesn’t work at current pricing / “sharing”. “
They recently announced they are going to raise their prices, so you agree they’re now fully profitable? Glad we agree.
Re: Re: Q4 report now out: Netflix burning $15 million a day.
“I know that Paramount (Viacom) posted 2018 losses of over $250 million”
OK, I just did a quick fact check and my memory appears to have been wrong there:
https://en.wikipedia.org/wiki/Paramount_Pictures
Revenue down US$984 million (FY 2018)
Operating Income down US$38 million (FY 2018)
Yet, my point stands – we don’t see our resident mental patient talking about how Paramount needs to die or how the traditional studio system is a failure. What’s particularly amusing is that Paramount have had some notable income in that time frame by selling titles to Netflix…
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Article 13 voted.
Is it still 'sharing' if...
…even if said companies do have a issue with password sharing; I pay a subscription for 4 devices and only use 1 myself, surely by ‘sharing’ my password I’m just using the service I’ve paid for already?
And so, how many of these ‘sharers’ are doing just that?
Re: Is it still 'sharing' if...
You are forgetting that the ones whining about this is the same sort of people who thinks the word sharing is an euphemism for piracy.
TLDR
Mike, instead of that long winded albeit informative article you could have just said: “they can’t compete effectively with other streaming services” to answer your own headline.
;p
Re: TLDR
Because there are other things that CAN happen/be done with the info that is created.
Many companies understand 1 simple thing…MAKE IT SIMPLE.
THEY PAID to create the service and to Send the movie, and the Movie company wants you to pay, for EACH TIME that movie was watched.. they WANT that extra $0.35 per person per showing of the movie..
They dont want these Sites to pay a 1 time price to Display to EVERYONE.. Go ask itunes the Hulu the fun they go thru with contracts that change every other month/year.. And they have to remove a Show, BECAUSE THEY SAY SO..
Then there are the Companies that DO this, and charge a small fortune to watch something 1 time(Vudu, youtube, MSN, Amazon,…)…I’d rather RENT the movie from red box or borrow it from a friend.
Streaming
If youre trying to access content from a specific region, then a vpn is the way to go. Only or mostly its the paid ones that do the job for you so I’d suggest Purevpn since theres an 88% off on it right now for Black Friday.
Many people don’t afford subscription especially south Asian countries. If Netflix wants success in country like India, Indonesia, Sri Lanka then they need to reduce the price.
Jack is a founder of https://newsmoze.com