Bloomberg News is reporting that Cable executives are beginning to understand the losses they are sustaining because of password sharing. Password sharing is when a user who has access to certain services, say ESPN or HBO shares a cable login with another so that they too can access the service without having to be a paying customer themselves.
This practice has been going on almost since streaming services came along. Want to watch Netflix, you can use my password etc. Many do this out of a sense of kindness, but the result is that companies miss out on earnings from people who obviously enjoy their services. Some executives, like Tom Rutledge chief executive officer of Charter Communications Inc are beginning to look into how to deal with the practice.
I have argued in the past that Netflix could avoid raising prices simply by making everyone who actually used the service pay at least $7.99 for it. The problem for companies is that it’s hard to figure out exactly how to limit things without making it next to impossible for legit customers to use the services. In the case of apps like the Charter Spectrum app, that allows users to access their entire cable package via an app, users are required to be in their homes where their cable boxes can be detected. This creates an alternative TV viewing opportunity for anyone with a connected device. But in the case of a password for Watch ESPN or HBO Go, this is not the case.
