Password Sharing: To Convert or Not Convert?

Sharing a streaming service password with friends and family is a common strategy for most viewers today to save on rising streaming costs. And for a while, streaming services across the globe allowed the practice to go on relatively unchecked, but that is quickly changing.  

In early 2022, Netflix announced they were going to crack down on password sharing, and now other streaming services are also taking a second look at password sharing across their platforms. Park Associates conducted a 2019 study which estimated password sharing cost US video publishers nearly $3 Billion that lost revenue has only increased over the years.

But how can streaming providers diagnose the size and scale of this problem? Many streaming companies lack the right data to uncover households that might be sharing passwords. Without insight into the number of users sharing a password, teams cannot make data-backed decisions on how to address this issue.  

Coming this Quarter: Password Sharing Analysis 

Password sharing is a mission-critical issue that media companies are now being forced to address. And while the decision to prohibit or allow the practice is up to each publisher, our team has introduced a new set of features to offer the right data to make that decision.  

These features allow you to not only identify the primary household using a set of credentials but also all the associated households using those same credentials. You can create specific segments to measure engagement across both primary and associated households under one set of credentials.  

With those standard segments, you can quickly assess the severity of password sharing across your entire subscriber base, or drill down into a specific subset of viewers. Then, you can analyze engagement by household to understand how those unique household segments engage with your content and consider this in your decision-making process.  

Perhaps you find that a segment of your audience is full of highly engaged secondary households using shared credentials. This data can help identify those households and attempt to upgrade them to a paid subscription. Alternatively, you may find a percentage of your password sharing audience is very passive in their viewing and therefore it may not make sense to lose their viewership and potential ad revenue through forced upgrades. 

With these household behavior insights, publishers can trust that whatever path they choose is backed by real world audience data. Segment analysis of password sharing can clarify the behaviors of various households and offer publishers a clear plan of action to address shared credentialed households.  

The Credential Sharing Dilemma   

Password sharing is a widely known problem within the industry, but each of the major streaming publishers have a vastly different approach to addressing it. While some are taking steps to limit sharing as much as possible, others have done little to curb the practice. 

There is no simple answer, and it depends on the central business goals of each publisher. While password sharing limits subscription revenue, it also increases exposure and engagement with your live and on-demand content. And while increased engagement and exposure may be optimal for a growing streaming provider, mature providers with higher market penetration may need to weigh the trade-offs of ad-based monetization versus subscriptions.  

Plus, it’s unclear if viewers who are forced to create their own account and credentials will actually subscribe or simply abandon the platform. In a recent study, of those individuals who admitted to sharing credentials, 57% do not intend to actually subscribe to the services they share.  

While the ultimate decision on how to proceed is complex, Conviva is dedicated to ensuring your team has the crucial data needed for informed decisions that will drive your ideal business outcomes. With such an impact on revenue, these choices cannot be made in a vacuum and require real word, real-time analytics to make the best call for your organization.