This is according to a new report from Parks Associates, which found that 1-in-5 young adults in the U.S. are using someone else’s account to watch a streaming (or over-the-top [OTT]) video service.
That number drops significantly to 10% for the next age group (25-34), and declines even further after that, though there is a slight bump in the 55-64 age group, implying that some older parents are using their young adult offsprings’ accounts to watch Orange Is the New Black and Transparent.
Parks claims that this credential sharing leads to a $500 million loss of direct revenue to the industry.
“Credential sharing has a measurable impact on video services, particularly in the OTT video service area, where young subscribers are active,” explains Glenn Hower of Parks Associates. “The impact on OTT video revenues is especially troublesome as OTT providers are investing large sums of money to boost their original content offerings.”
Certain OTT services, like Hulu and Sling, make it more difficult to share passwords by limiting streaming access to a single device at any given time. The typical Netflix account allows for simultaneous streaming on two screens; customers can upgrade their account to increase that to four screens. Netflix also lets users create different profiles so that multiple users can have their own queues and recommendations.
“While credential sharing predominantly impacts OTT service revenues, the process will affect pay-TV operators in a similar fashion as they develop and deploy their own OTT and TV Everywhere offerings,” Hower says. “The motivation for credential sharing is primarily economic, and a move to consolidate video service subscriptions among family and friends stands to impact digital video services of all types in the near future.”
by Chris Morran via Consumerist
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