Password-sharing millennials are cutting into Netflix & Amazon’s profits
Password-sharing millennials are killing content hubs like Netflix, Amazon and Spotify by shorting them of potential millions in revenue. The phenomenon of password sharing – while not exclusive to – is prolific amongst younger audiences, who use extreme measures to skirt payment for streaming services; if Netflix puts capacity at two users a time, swindlers can, for example, create a rota of designated access times.
This is not a fringe undertaking; over a third of millennials share passwords for such services, reports media research company Magid, with the final figure coming in at 35%. Meanwhile, only 19% of Generation X (born 1965-1984) users share passwords, and just 13% of Baby Boomers (born 1945-1964).
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This might sound like a relatively harmless – even benevolent – phenomenon, but it’s harming the business of streaming services in a not-insignificant way. If you calculate the revenue lost from the masses of potential subscribers who don’t cough up monthly subscription fees, services like Netflix lose out on hundreds of millions of pounds in potential revenue.
However it’s not something that streaming giants are getting too hot under the collar about… yet. Back in 2016, Netflix CEO Reed Hastings maintained that password sharing “hasn’t been a problem”, and seemed self-assured that he could attract new (paying) users. This comment was reminiscent of one made by HBO CEO Richard Pleper two years prior, who remarked that, “It’s not that we’re ignoring it, and we’re looking at different ways to affect password sharing. I’m simply telling you: It’s not a fundamental problem.”
Experts now reckon this devil-may-care attitude is a little complacent. Speaking to CNBC, executive president of Magid, Jill Rosengard Hill, lamented the state of the situation: “The cat is out of the bag,” she explained. “I wish I had a solution, because it’s really hurting the business model and monetization of these premium high value services.”
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That being said, it’s easy to reframe the case for password sharing as a user retention strategy. Subscribers are less inclined to cancel their subscriptions if their partners, friends or flatmates are using the service. There are even memes devoted to the phenomenon: “Yeah I shared my Netflix password with her,” reads one, “So I guess you can say things are getting pretty serious.”
In an age where many young people will never scale the property ladder, university tuition costs £9,000 and the blame is put squarely and unfairly on millennials’ love of avocados, youngsters have to take their (modest) wins whenever they can. And with Jeff Bezos now worth $150 million, you’ll have to excuse us if we don’t shed a tear when the tiny violins start playing.
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