Pay Television and the Fight Against Password Piracy | Koeppel Direct

Pay Television and the Fight Against Password Piracy

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What’s a shared password between friends?

For many pay television companies, it could mean billions in revenue at a time when subscriptions are already shrinking due to an increase in cord cutting practices. Charter CEO Tom Rutledge is leading the charge for a change in the way the industry handles pay television streams, but some fear that too heavy of a hand will continue to scare off subscribers who are already on the fence about maintaining their cable bundles.

Who are the Pay Television Pirates?

Recently, Disney’s ESPN hosted a research group consisting of about 50 Millennial-aged sports fans.

When the question came up about password sharing, participants were asked to raise their hands if they had given their pay-television password to someone else. According to reporting by Bloomberg, every person in the room admitted to being a pay-TV pirate.

Add this to anecdotes like Charter’s Rutledge uncovering a single subscriber having 30,000 streams running from the same account, and the piracy problem does look like it has really gotten out of hand. However, HBO spokesman Jeff Cusson told Bloomberg in an interview that the problem is “still relatively small, and we are seeing no economic impact on our business.”

According to Cusson, most passwords are casually shared among friends and family members, not on global scales. Parents might share with college students or adult children share with their elderly parents. Largely, the password sharing is happening between an account holder who is happy to pay for television and someone in their inner circle who would not have it in the budget.

How Many Streams to Allow?

Sometimes, account owners are legitimately hacked and their passwords given out to anyone who will have them. In these instances, it’s important to have a policy in place that allows the network or pay television company to intervene, but how many active streams sound an alarm is the question the industry is asking itself.

Currently, Netflix streaming allows four active streams on its top-tier plans, HBO allows three streams and DirecTV Now allows two. Rutledge argues that the number of streams is of vital importance because about one-third of American homes have just one person living there. Those extra streams could be potentially shared with others, costing even more subscribers.

On the flip side, a family of five with teenagers that can only have two active streams at once may not be willing to pay premium prices for less service than they need. The simultaneous stream issue is one that has to be resolved globally, so distributors, programmers and customers can all find something to be happy about.

 

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