NEW YORK (AP) – Many of us were taught to share as children. Right now, streaming services from Netflix to Amazon to Disney + want us to stop.
That’s a new directive from the streaming media giant hoping to discourage account password sharing without surprising subscribers familiar with the hack.
Password sharing is expected to bring the streaming service billions of dollars annually in lost revenue. That’s a small problem right now for an industry that has roughly $ 120 billion a year. But the prerequisites for programming a remarkable newcomer, Amazon’s upcoming “Lord of the Rings” series is reportedly going to cost $ 450 million for the first season alone. More than four times the price of HBO̵7;s “Game of Thrones”.
“Frankly, the industry is getting attention to that, it’s a question of when, not if,” said CFRA analyst Tuna Amobi. “The landscape seems to be built in terms of these new entrants, so it’s a moment. That’s great to get a much better deal for followers. ”
It’s a tricky balance.Video companies have offered a legitimate way for multiple users to use the service by creating profiles or offering different levels of screen sharing to allow. Tighter password sharing rules could encourage more people to bite the bullet and pay the full price for their own subscription. But a hold that is too hard can alienate users and drive them away.
In March, some Netflix users began receiving pop-ups asking for account verification by entering a code sent via email or text. But it still gave them the option to confirm “later.” Netflix did not say how many people took part in the test, or only in the US or elsewhere.
“They’re going to take a very careful approach,” Amobi said. “There is always a downside to this kind of movement.”
The tests come at a crucial time for Netflix, the subscriber growth caused by the outbreak of the pandemic last year is slowing. It is still a streaming service with more than 200 million followers worldwide. But there are many new competitors emerging, including Disney +, which is cheaper and has 100 million followers in less than two years.
When Disney + launched in 2019, CEO Bob Iger said the service was based on sharing.
“We are setting up a very family-friendly service. We expect families to be able to use it, such as four live streams,” he said in a CNBC interview. Various technological tools we have for us to examine. But it is clearly something we have to see. “
About two out of five online adults share passwords to online accounts with friends or family members, according to the Pew Center for Internet and Technology.Of the millennials, it’s even higher: 56% of adults online. Between the ages of 18 and 29 years, the password is shared.
“With the cost of all the streaming platforms purchased together the same as the cable – which should be eliminated – I think it’s great to be able to share your login to help family and friends.” Save a few bucks, ”says Ryan Saffell, 39, IT director of Las Vegas.
Another study found that more than a quarter of all video streaming services are used by multiple households. This includes families or friends who share accounts they pay outside of the household, or typically, multiple households split their expenses, and 16% of all households have at least one service that someone else pays fully according to the study. Of the Leichtman Research Group, which increases to 26% for 18 to 34 year olds.
Sharing or stealing passwords, the streaming service grossed $ 2.5 billion in 2019, according to the latest data from research firm Park Associates, and is expected to rise to nearly $ 3.5 billion by 2024.
That may be just a small fraction of eMarketer’s $ 119.69 billion projected people will spend on video subscriptions in the United States this year. But membership growth is slowing and costs are rising.
Companies are investing heavily to produce their own movies and original shows and stand out from competitors.Disney + says it will spend up to $ 16 billion annually on new content for Disney +, Hulu and ESPN + by fiscal 2024, Netflix expects. It will spend $ 19 billion for the manuscript this year, the research firm Bankr estimates.
“Programming costs are doubled, or in some cases, tripled and quadrupled, so you pay somewhere,” CFRA’s Amobi said. It’s the next few years before it reaches break even, so a subscription can be used whenever you get it. “
Another way to finance the new program is to raise prices.Netflix raised the price of its top-most popular plan by $ 1 last October to $ 14 a month.Disney + followed in March, with a $ 1 per month increase. A month is 8 dollars
Josh Galassi, a 30-year-old Seattle native who works in public relations, said everyone he knows shares passwords if companies start cracking down on him, saying he will subscribe to the services he uses. But if only his favorite shows are on the service, such as “The Good Fight” on Paramount +, he does that to Starz’s “Outlander”, subscribing to them only when the show is open and then canceling.
“One rule I have is that I only share passwords with close friends or family members,” Galassi said, “or someone I know who has a service that I don’t want to pay for. Willing to share in exchange for what I paid for?
Netflix played out a user verification test in March, telling investors it was an ongoing effort and nothing new.Reed Hastings, the company’s co-founder and CEO, pledged not to make any sudden changes to customers too suddenly.
“We will never release something that feels like ‘screw it up,'” Hastings said in a call with analysts in April. “It has to feel that it makes sense for consumers that they understand.”
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