Industry Voices—Hawley: Coronavirus piracy trends in the new normal

Steve Hawley Industry Voices

Although many details are being kept off the record for now, the impact of coronavirus on media and entertainment is starting to come into focus. Pay TV operators, streaming video providers and their technology suppliers are still busy discerning the emerging trends from the noise, to ensure that they don’t take the wrong actions prematurely. But, there are some things we do know.

Credential sharing

There have been some public reports that credential sharing has increased dramatically in recent months.  A OnePoll study commissioned by Tubi reported that as of March, 42% of adults were sharing account credentials. By comparison, last July, Parks Associates estimated that 28% of broadband households were engaged in password sharing and piracy for 2019, rising by 10% in 2024. A follow up Parks Associates report that focused specifically on piracy released in January 2020 further detailed that about 72% of that 28% rate was due to password sharing. Coronavirus has certainly called such estimates into question.

André Christensen, CEO of OTT platform provider Firstlight Media, which recently acquired Quickplay Media from AT&T, added that beyond the increases observed for credential sharing, “account hacking attempts have also spiked disproportionately. We see logins to the same accounts being attempted at the same time from different parts of the world, as well as from multiple devices in the same household.”

Setting aside the question as to whether credential sharing is piracy, the OnePoll/Tubi study also said that just 11% of sharing was with people other than partners, friends or family members. While some consumer password sharing might constitute infringing use, tools are available to video providers that want to measure and stop it; and that consumer sharing is not the same as professional pirates using stolen databases to penetrate accounts.

Programming impact

As we’ve seen widely reported in the industry press, many premium online video providers – ranging from pay TV operators and streaming providers that are well known to us, to the Metropolitan Opera and The Berlin Philharmonic – have selectively lowered their paywalls and are experimenting with new kinds of bundles, in efforts to attract new subscribers that would hopefully stick around later.

While live sports programming is well documented as being the most commonly pirated content, there hasn’t been much live streaming piracy to measure since coronavirus has shut down virtually all sporting events. Firstlight’s Christensen noted that if total piracy is still growing at a rate that’s even close to the rate as before, it would suggest that piracy is growing disproportionately for the non-sports categories, but he was quick to say that Firstlight has not seen data to support such a claim.

In lieu of sports events, Christensen believes that piracy consumption of news, reality shows, game shows, and longer-tail VOD content has increased, but again, it’s too early to draw conclusions.  “Even the pirates seem to be running out of content to watch,” he said.

With people sheltering at home – and video stars are people, too – there have been some interesting experiments in programming. Earlier this month, Jimmy Fallon, who has been hosting The Tonight Show from home, brought musicians Sting and The Roots together for what should be the iconic performance of the Covid era: a remix of the Police song, “Don’t Stand So Close To Me,” by videoconference. This week, Disney+ ran a “Disney Family Singalong,” where celebrities from the Disney universe sang and danced their way through an hour of performances (also via video conference).

Live performances by videoconference may seem to be low-risk for piracy, but attacks against personal videoconferencing platforms are becoming well documented. It’s probably just a matter of time before an instance of theft is reported through that medium.

What about churn?

There was a period where OTT providers were concerned about losing streaming subscribers to churn, especially as new choices seem to arrive almost daily, but there is some evidence that consumers with fixed entertainment budgets will drop one service, try another, and then return later to one that they dropped when it offers programming of interest. There is no reliable evidence that coronavirus is driving churn, due to reduced discretionary income, piracy or other reasons. Yet.

But the topic of OTT churn leads to another OTT video phenomenon that some consider to be akin to piracy: the abuse of free introductory trial offers for streaming services. To see whether the pandemic has impacted demand for free offers, I contacted CobbleCord, whose service is designed to recommend OTT video offerings based on a consumer’s stated interests and price points.

“While we can’t see whether or not consumers are abusing trial offers,” said CobbleCord CEO Virginia Juliano. “We are seeing more demand for free trials. People are shocked that there are more than 300 services out there; many with content they’ve never heard of.” But she noted that the real test will go to whether these new viewers are given sufficient incentive to stay after the trials are over.

Why this matters

Christensen said that credential sharing and the abuse of credentials for piracy is really a new business opportunity for operators; to create loyalty and to get new users by creating new multi-device bundles, family-and-friends plans, etc. At the same time, attempts at infringing use puts pressure on the platform, and video providers should be mindful not to prevent legitimate users from logging in.

Juliano had a similar suggestion: “To help them reduce the risk of churn, video providers should take an aggressive approach with customer relationship management and retention programs.” Good advice, coronavirus or not.

Since more objective data about the impact of coronavirus on piracy is still being held closely, if it’s ever available at all, a statistical analysis of how piracy has changed will have to wait for future reports.

Steve Hawley is managing director of Piracy Monitor, which provides news and insights about video and audiovisual content piracy, and its effects on video providers, creative professionals and on consumers. Subscribe to the E-Newsletter to receive news and updates. Piracy Monitor is active in four areas: Piracy awareness, Market intelligence, Industry marketing and Consulting. Mr. Hawley is also a contributing analyst to Parks Associates and S&P Global Market Intelligence.

Industry Voices are opinion columns written by outside contributors—often industry experts or analysts—who are invited to the conversation by FierceVideo staff. They do not represent the opinions of FierceVideo.