Sharing Netflix, other SVOD accounts is prevalent among OTT households--but how much it matters is relative

Among the 57 percent of U.S. broadband households that have an over-the-top video subscription like Hulu, Amazon (NASDAQ: AMZN) Prime Instant Video or Netflix (NASDAQ: NFLX), 11 percent are using shared accounts provided by people outside the home, a new Parks Associates study says. But the question remains as to whether account sharing is a real problem, or an opportunity for SVOD (subscription video on demand) providers.

Parks portrayed account sharing in its release as a "lingering challenge," and indeed, most if not all SVOD services limit the number of devices that can stream content simultaneously. Netflix's "Standard" account, for example, allows only two devices to use the service at the same time, while its "Premium" account ups that to four. Amazon permits subscribers to stream "up to two titles at the same time using the same account" but when streaming the same title, users can only see it on one device at a time.

However, HBO Now and its TV Everywhere counterpart HBO Go have, famously, no apparent limits on how many devices can stream from the same account (although there is a limit, as yet unnamed to how many videos can be simultaneously streamed across multiple devices). The premium network's CEO Richard Plepler has said repeatedly that HBO sees password sharing as a way to attract new subscribers, and that it's "not as extensive a problem as some of the public narrative would suggest."

Hey, at least they're not torrenting Game of Thrones if they're watching from a shared password, right?

In a similar vein, Netflix decided to look the other way in regard to VPN masking by Australians as it prepared to launch its service down under. While not exactly explaining the reasoning behind the move, it made sense for the SVOD service to expend its efforts on prepping a high-quality service rather than chasing down the 20,000 or so Aussies who were pretending to be U.S.-based subscribers. As Cliff Edwards, director of corporate communications and technology for Netflix, told ZDNet, the provider was confident that the "better experience" of streaming Netflix Australia would put a damper on VPN masking.

Although only a small chunk of SVOD households share passwords (or admit to sharing them), Parks Associates argues, the issue isn't a small one. "OTT video accounts for a disproportionate amount of content consumed when compared to expenditure—over one-third of video consumed per week is OTT, but it is only 9% of the household video budget," said Parks Director of Research Brett Sappington. "Account sharing is part of the larger problem in monetizing the strong consumer demand for OTT content."

Among SVOD households, 22 percent of younger millennials--those aged 18-24--use shared passwords to access OTT services. A further breakdown of the numbers showed that 11 percent of Netflix subscribers, 10 percent of Hulu subscribers, and 5 percent of Amazon Prime subscribers are using an account paid for by someone else, Parks found.

Parks Associates on shared password OTT

A small slice of OTT viewers have accounts paid for by someone outside their home. (Source: Parks Associates)

Parks' research is similar to a recent report by The Diffusion Group that surveyed individual broadband users and found that 19.9 percent are streaming Netflix using someone else's account, while just 9 percent are sharing Amazon Prime passwords. It also found that 21.2 percent of users are sharing Hulu passwords, and that more than one-quarter, 25.5 percent, of Sling TV users are viewing the linear OTT service via someone else's account.

For more:
- see the release

Related articles:
Netflix's Aussie strategy: Let 'em VPN, at least up until launch
Hulu cracks down on VPN masking to block access by non-U.S. viewers
A quarter of Sling TV users are cribbing usernames and passwords, TDG says