Why Does Everyone Else Want To Stop Netflix Password Sharing, When Netflix Is Fine With It?


I'm not quite sure why everyone is so obsessed about the "problem" of Netflix password sharing, even though Netflix itself is fine with it. For a few years now, we've noted that Charter Spectrum's CEO Tom Rutledge never misses an opportunity to scream about how awful it is that HBO and Netflix have to deal with people sharing passwords, even though the CEOs of both companies have made it clear that they're fine with it as it tends to act as free promotion to get people to sign up for their own accounts over time. Here's HBO CEO Richard Plepler from a few years ago:

"It’s not that we’re unmindful of it, it just has no impact on the business,” HBO CEO Richard Plepler said. It is, in many ways, a “terrific marketing vehicle for the next generation of viewers,” he said, noting that it could potentially lead to more subscribers in the future. “We’re in the business of creating addicts,” he said.

And here's Netflix CEO Reed Hastings at CES three years ago:

"We love people sharing Netflix," CEO Reed Hastings said Wednesday at the Consumer Electronics Show here in Las Vegas. "That's a positive thing, not a negative thing."...A lot of the time, he said, household sharing leads to new customers because kids subscribe on their own as they start to earn income.

Given that, you'd think that (1) a company would think twice about using CES this year to declare that it had a "solution" to the "problem" of Netflix password sharing, and (2) that press outlets like The Independent and Slashdot wouldn't just repeat that company's talking points.

Basically, some company claims it has an AI solution that can "detect" when someone is likely password sharing. To be honest, it's probably not "AI" so much as "oh look, this person is logging in from different IP addresses that appear to be in different locations too closely together" which pretty much anyone -- including the programmers at Netflix and HBO -- could code up in a weekend or so if they wanted to.

Incredibly, the Independent piece repeats claims of "losses" from password sharing that are complete bunk:

Separate figures from research firm Parks Associates predicts that by $9.9 billion of pay-TV revenues and $1.2 billion of revenue from subscription-based streaming services will be lost to credential sharing each year.

Except, that assumes that everyone using a shared password would otherwise buy, which is ludicrous. And, again, the companies whose actual existence depends on this, both insist that it's not having any impact, other than acting as free marketing for them to later sign people up long term. Incredibly, the reporter at the Independent includes that bogus "study" and other quotes about how password sharing is "too expensive to ignore," but doesn't bother to check to see HBO or Netflix's opinion of whether or not this is actually a problem.

It really is a shame that so many people automatically default to the idea that people sharing access to content must automatically be "a problem" that must be "stopped." The companies who dominate this space don't see it as a problem, and just because some company's PR team got the ear of a reporter, that doesn't change reality.