Streaming services have become a popular and convenient way to access entertainment content, especially during the pandemic. However, many users have been sharing their passwords with friends or family members who live outside their household, violating the terms of service of these platforms. In this article, we will explore how streaming services such as Netflix and Disney+ are cracking down on password sharing, and what this means for consumers and the industry.
Password sharing is a common practice among streaming users, who want to save money or share their favorite shows and movies with others. According to a survey by Forbes Advisor, 56% of Americans say they are still sharing passwords on streaming accounts, even though 33% report having to create their own account after password crackdowns [1]. Password sharing can also be seen as a form of word-of-mouth marketing, as it exposes more people to the content and may encourage them to subscribe in the future.
However, password sharing also reduces the revenue potential of streaming services, who have to invest heavily in producing and acquiring content. Streaming services have different policies on how many devices or profiles can be used simultaneously on one account, but they generally prohibit sharing passwords with people outside the household. For example, Hulu’s updated subscriber agreement states that passwords may only be shared with people in the “primary personal residence” of the account holder, and that Hulu may analyze the use of the account to determine compliance [2]. Similarly, Disney+’s terms of use state that accounts are “for personal and non-commercial use only” and that users must “not share passwords or credentials” [3].
Streaming services have been ramping up their efforts to curb password sharing in recent months, using various methods such as sending verification codes, offering paid-sharing options, or terminating accounts. Netflix, which has been testing its password crackdown in several countries since early 2022, began its U.S. rollout in May 2022. Netflix users who are flagged as potential password sharers are prompted to verify their identity via email or text message, or start their own subscription. Alternatively, they can pay an extra $8 per month to add a member outside their home to their account [4]. Netflix claims that its paid-sharing initiative has contributed to its revenue growth and subscriber additions, reaching 260 million subscribers in the fourth quarter of 2022 [4].
Disney+, which has over 111 million subscribers worldwide, is following a similar strategy. Starting from January 25, 2024 for new subscribers and March 14 for existing subscribers, Disney+ account holders will be presented with new capabilities that allow them to start their own subscriptions or pay an additional fee to allow individuals outside their household to access their account. Disney expects to see notable benefits from these paid-sharing initiatives in the second half of 2024 [5].
The password crackdown by streaming services may have different impacts on consumers and the industry. On one hand, it may deter some users from subscribing or renewing their subscriptions, especially if they are not willing or able to pay more for sharing. On the other hand, it may also encourage some users to sign up for their own accounts or switch to cheaper or ad-supported tiers. Moreover, it may improve the customer experience and satisfaction by reducing congestion and buffering issues caused by excessive password sharing. For the streaming industry, the password crackdown may help increase revenue and profitability, as well as reduce piracy and fraud. However, it may also face some challenges such as customer backlash, legal disputes, or technical glitches.
In conclusion, password sharing is a widespread phenomenon among streaming users, but it is also a violation of the terms of service of streaming platforms. Streaming services such as Netflix and Disney+ are cracking down on password sharing by using various measures such as verification codes, paid-sharing options, or account termination. The password crackdown may have positive and negative effects on consumers and the industry, depending on how they respond and adapt to the changes.
References:
[1] Survey: 56% of Americans Still Sharing Passwords on Streaming Accounts
https://www.msn.com/en-gb/money/other/survey-56-of-americans-still-sharing-passwords-on-streaming-accounts/ar-BB1ilpbH
[2] Hulu confirms it’s cracking down on password sharing just like Netflix — here’s when it starts
https://www.tomsguide.com/entertainment/streaming/hulu-confirms-its-cracking-down-on-password-sharing-just-like-netflix-heres-when-it-starts
[3] Disney+ Terms of Use
https://www.disneyplus.com/legal/subscriber-agreement
[4] Disney+ Readies Its Password Crackdown Era
https://www.hollywoodreporter.com/business/business-news/disney-password-sharing-accounts-hulu-1235824872/
[5] Details of Disney+ password-sharing crackdown are similar to Netflix
https://www.msn.com/en-us/money/companies/details-of-disney-password-sharing-crackdown-are-similar-to-netflix/ar-BB1hZSnq
