Viewers are concerned about more streamers clamping down on their password sharing, according to findings from Horowitz Research. But should they be faced with no other option, a considerable percentage are willing to pay for top services in full.
The firm’s “State of Media, Entertainment and Tech: Disruptions” report found that one-third of US TV viewers borrow log-in credentials or share the cost of at least one service they use. The top cited motives were: “Someone I know already had an account,” “I can’t afford it at this time,” and “I am just doing it to access a specific show [or] type of content for a short period of time.”
Nearly half of surveyed viewers are worried that the streaming services they use will start implementing preventative measures on password sharing — with 23% of viewers “very worried” and 26% “somewhat worried.”
Validating those concerns, Disney-owned Hulu and Disney+ are the latest to announce the end of password sharing — which will officially begin on March 14. Hulu earlier this month sent out an email with updated subscriber agreement terms that included “adding limitations on sharing your account outside of your household.” Moreover, the new user terms detail that Hulu may “analyze the use of your account to determine compliance with this Agreement.” This week Disney+ sent similar emails to subscribers,
It follows an earlier password sharing crackdown by SVOD giant Netflix last year.
Nevertheless, around half of the respondents in the report who borrow logins or share costs for larger platforms would be willing to pay for the full services if they weren’t able to share: Netflix (54%), Max (50%), Disney+ (48%), Hulu (48%), Prime Video (47%) and Paramount+ (45%). However, it’s worth noting that willingness to pay full price for Netflix instead of sharing dropped significantly since 2022, when the percentage stood at 71%.
Viewers sharing passwords on smaller services were less likely to switch to paying full price, and that’s likely because of their limited libraries, according to Horowitz Insights and Strategy Lead Adriana Waterston.
Over an email-conducted interview, Waterston explained to StreamTV Insider (STV) that despite the possible backlash that comes with ending password sharing, “what keeps people connected to these services is the desire to have access to the content they value and want to watch.” Bigger services are far more protected. As soon as a new original-content show starts getting buzz, many will resubscribe, “unlike smaller services that have a more narrow array of shows, less promotional abilities and less in the way of exclusive content,” she noted.
Waterston believes that the backlash from Hulu and Disney’s recent announcement will be temporary, but Disney will still need to sort out how it determines people are ultimately outside of a household.
When Netflix put an end to its password sharing, it cited using “information such as IP addresses, device IDs and account activity” to determine if devices were outside of a household. But Waterston used her own multi-home situation as an example where an account may be falsely flagged. She also suspects families with college students are another example where streamers “need to make allowances… or else they do risk alienating large swaths of viewers.”
While Waterston does feel the backlash will subside so long as Hulu and Disney continue to deliver valued content, she also wonders how streamers will deal with new model’s impact on churn.
“We already know that in the streaming world, people are very willing to binge-watch a series, then cancel once they are done,” she wrote. “The services will have to be really strategic about their windowing and release strategies to keep viewers in their ecosystem.”
Who thinks password sharing is ok?
With more streamers cracking down, the report also tapped into how ethical password sharing felt among different TV watchers. Only three in 10 consumers said it was unethical in all circumstances.
But in breaking down those who found it acceptable, 42% said so contingent on password sharing being within their own family, even if they were not in the same household. Sixteen percent found it acceptable to share with anyone.
The report further found that these ethical considerations changed by age group, with only 13% of those aged 18-34 finding sharing accounts unethical — compared to 24% among respondents aged 35-49 and 41% of those over 50. The 18-34-year-olds were also most likely to password share in general (54%), followed by 35-49-year-olds (37%) and 50+ year-olds (17%).
Waterston was surprised that three in 10 respondents found it unethical no matter the situation, given how common password sharing is. And streaming providers haven’t historically condemned it. Netflix, for example, tweeted, “Love is sharing a password” in 2017.
But while streamers once appeared relatively tolerant of password sharing, they have shifted from prioritizing sub-growth to profitability, and the ecosystem has changed — as Aluma Insights Senior Analyst Douglas Montgomery shared with STV in an earlier interview. And as long as profitability reigns a chief concern, streamers are likely to keep cracking down on password sharing, according to Waterston.