Charter Communications and ESPN are spearheading a push to limit password sharing of multiscreen services.
As reported by Bloomberg, Charter asked Viacom during program licensing renewal negotiations this fall to cut down on the number of concurrent streams it allows for TV Everywhere access to MTV, Comedy Central and other channels.
ESPN, meanwhile, has cut down the number of concurrent streams it allows for its channel apps from 10 to five, and it’s thinking about taking the number down even further to three.
“It’s piracy,” said Justin Connolly, executive VP for affiliate sales and marketing for Disney channels including ESPN, to Bloomberg. “It’s people consuming something they haven’t paid for. The more the practice is viewed with a shrug, the more it creates a dynamic where people believe it’s acceptable. And it’s not.”
Connolly and his team recently assembled a focus group of 50 millennial-aged sports fans. He said that when the group was asked how many of them share passwords, every member raised a hand.
According to Parks, the revenue loss due to sharing of pay TV multiscreen app passwords will reach $9.9 billion in 2021 from a current level of $3.5 billion. For the linear pay TV business, the problem goes hand-in-hand with cord cutting. Linear services have lost nearly 3 million customers so far this year.
During Charter’s third-quarter earnings call, Charter Chairman CEO Tom Rutledge outlined the problem to investment analysts.
“There's an enormous ability for people to receive free content because of the way content distributors are securing their product so ineffectively,” Rutledge said. “And as a result of that, I think you'll see continued pressure on video.”