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. icon
    ltlw0lf (profile), 6 Nov 2015 @ 12:09pm

    Re: Which is he complaining about?

    If it is college kids with the password for their home account then that seems exactly what that is designed for. While in college they are still in most cases for legal purposed residing at their parent's house. The HBO login is designed to allow you to watch content while away from home. The fact that they are away from home for four years is only a detail.

    This, and the fact that most Dorms won't allow you to wire cable or run satellite dishes. They may have cable, but in many dorms I've been to, the cable is run to a central location or a "break" area and not into the rooms themselves. Unless you are in a new or newly remodeled dorm, you don't have cable, wired internet, etc.

    You have wireless, offered by the school, or you have a central area where you can sit and watch cable.

    Cutting off access to HBO isn't going to make students go out and buy a connection because they can't. Just like anyone who has lived in a old apartment complex or a high-rent Home-Owners Association can't just go out and buy cable unless city hall lets you, and you can't fight city hall.

    By keeping the students hooked while they are in school, HBO only assures that they stay hooked when they move out. Cable CEO is the one who has lost all sense of marketing reality and just is in it for the short term greed and not looking at the long game.

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