I remember just a handful of years ago sitting at my first-ever CES listening to Netflix CEO Reed Hastings talk about the well-known phenomenon of password sharing among the company’s millions of users. It’s a “problem” that the company has done little about because, as Hastings put it, it’s also one of their best (and cheapest) marketing tools.
Password sharing is like the gateway drug to streaming media services. Once you’ve been given a little access to the sweet elixir that is thousands of hours of bingeable content, you’re going to want more. And as soon as that access gets cut off—likely because your source has let their own account lapse—you’re going to want to get your own account so you can keep up with the latest original series.
For providers like Netflix, password sharing has done plenty of good over the years. But there’s still the potential for lost revenue there. And, in fact, new research shared by Synamedia—which calls themselves the largest independent video software provider—at CES 2019 showed that 26 percent of millennials share passwords for streaming services. That number, the company said, adds up to more than $11 billion in potential revenue loss for pay-TV ($9.9 billion) and OTT ($1.2 billion) services.