Cable CEO Is Really Pissed That HBO Hasn't Cracked Down On Streaming Password Sharing

from the get-over-it dept

As HBO's streaming service popularity has taken off, the company has yet to crack down on the sharing of passwords, believing it's a great opportunity to have programming junkies market the brand for you. We all of course already knew that sharing HBO Go passwords was a violation of the anti-circumvention clause of the DMCA and an unholy sin. But according to Charter CEO Tom Rutledge, the sharing of streaming service passwords is also a diabolical theft of content that needs to stop immediately.

During the cable giant's recent quarterly earnings call, Rutledge decided to rant a bit about the perceived injustice of college students using their parents' passwords, insisting that HBO's leniency on this front showed a complete misundertanding of the market:
"But to Rutledge, companies like HBO show a "complete lack of control and understanding in the space" by letting password sharing continue, and it's something that must be stopped. "The lack of control over the content by content companies and authentication processes has reduced the demand for video because you don’t have to pay for it,” Mr. Rutledge said on the earnings call. “That’s going on in the college market."
But it's Rutledge who appears to have shown his lack of understanding of the market he serves. The CEO assumes that if you crack down on college kids sharing HBO passwords that these kids are magically going to go out and sign up for cable connections. What's more likely to happen should you crack down on the practice is that that these kids (most of whom are on a budget) will turn to cheaper streaming alternatives like Netflix -- or piracy. But in traditional legacy exec thinking, everybody's a criminal, even though Rutledge's company simply refuses to seriously compete on price.

Earlier this year HBO CEO Richard Plepler said the company keeps a close eye on the password sharing stats, and it's not really a significant number of people. Plepler (the guy Rutledge implies doesn't understand the market) a year earlier made it clear he understood the market perfectly well:
"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.
So, whereas HBO thinks it's a good idea to turn the other cheek on a statistically insignificant practice to generate brand obsession, Charter (soon to own Time Warner Cable and Bright House Networks in a $75+ billion merger) thinks it's a better idea to treat college kids like criminals, and in the process, driving them to Netflix and BitTorrent networks.

Filed Under: cable, competition, hbo, password sharing, streaming, tom rutledge
Companies: charter, hbo


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  1. identicon
    Anonymous Coward, 5 Nov 2015 @ 8:43am

    Re: Re: Re: Re: Re: Ah

    Well I think the basis of copy protection laws are partly contract law indirectly. If I write a book and I sell you a copy under the agreement that don't resell that book or give it away and you do then you violated an agreement with me. I agree with our natural right to make agreements. Now there are naturally limits to this. If I say, for instance, that by reading this comment you agree to give me a thousand dollars that's ridiculous. There is a lot of grey area as well. What about a TOS or EULA that you click I agree to or a ridiculously long agreement that you may get when you buy something simple from the store that no one ever reads. Many courts have ruled that such agreements maybe void for being very one sided just like they have ruled in the past that very one sided contracts given under very casual circumstances maybe void (vs two capable corporations with lawyers to negotiate the agreements). Or what about buying a piece of software that doesn't allow for returns with no disclosure of the TOS agreement before buying on the box. So you buy this product and later you read the TOS, disagree with it, and wish to take it back? Should you be allowed to take it back or violate the TOS because it's not something you agreed to before you bought the product? The product requires that you agree to the TOS before using it but it doesn't seem to require for you to agree to anything before buying the product. I think such practices are rather shady and the fact that these practices seem to be standard these days shows what kinda shady practices our government allows.

    But what distinguishes copy protection laws from contract law is if I buy a song from you and agree not to give it to anyone else and then I do give it to some else who agreed to nothing the law can then go after the person I gave it to if they decide to redistribute it. The agreement was only between me and the person that sold me the content and so, at least in terms of contract theory and the concept that we should be allowed to make agreements that should be honored, the law should only allow them to go after me and not everyone else that agreed to nothing.

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