The latest IBC webinar, titled ‘Converting Password Sharing into Subscriber Growth’, took a deep dive into the topic of password sharing, both from a prevalence point of view, and also from an enterprise perspective.
The webinar kicked off with a scene-settng conversation around the central role that Netflix has played in the space, with Nitsan Baider, Director of Product Management, Synamedia being unequivocal as to the importance of the SVOD player as a formative force.
“Netflix has been a definitional force in this market and for many years Netflix was regarding credential sharing as a positive. Credential sharing gets the word out, it gets more people viewing the content and people maybe get FOMO and want to sign up to the service and so the service grows”, he noted.
Exponential growth slowing, revenue questions arise
However, once the initial exponential growth trajectory begins to slow, Baider said, more searching questions begin to be asked.
“Part of the answer is a lot of the money is going on streaming to households that are not paying. Not to mention the fact that you have the burden of streaming to all those houses, and that’s a cost. I think Netflix started looking at this more than just a few weeks or months ago, we’ve seen Netflix sort of hinting and starting to dabble with what to do about credential sharing.
“I think, ultimately, they were trying to tread on eggshells, trying not to upset anybody, but still get some revenue back. But from our experience, having spoken to other service providers, not everybody has the same approach. It really depends on culture. So Netflix has their own way of doing things, [while] others might have other ways - some may be more straightforward about saying ‘No, sharing is bad’, and want to do something about it.”
Central challenges to identifying sharing
However, whether the streaming player is the scale of Netflix or not, the same challenges immediately apply, even once a policy on password sharing has been articulated, the webinar went on to unpack. The core challenge being to understand what constitutes password sharing, in a world where a single legitimate user might use a range of devices in the home, but also when travelling.
Baider pointed out that streaming services all operate differently, some without registering devices, some without limiting the number of concurrent streams per account.
“So ultimately, if you can provide multiple streams for a single account, it’s not easy to track whether those strings are being used by one family or by multiple families, right? Yep, four streams, is it four members of the family, or four separate families using the same account?
“There are various ways of doing so, of course, but it’s not straightforward. We’ve tried a number of ways of doing it and some methods failed miserably until we got it right. We talked to several service providers who tried it themselves and they pretty much fell into the same traps as we did. Often, you try to do it by trying to count how many devices, how many locations, how many cities, how many ISPs, whatever, and you end up with a lot of false positives, false negatives, it’s not easy to do.”
Hunting the ROI
Even once the sharers have been identified, the question of generating ROI from the process involved in finding them is something of an open book in these early days. However, Baider had an interesting case study to share with some figures to bring some light:
“One customer had 359,000 accounts. Out of those accounts, we were able to identify 55,000 as shared accounts, which constitute a little over 15%. All of those accounts are accounts where we’ve seen that there’s not just one household using that account, but two or more. The number of additional households that are sort of piggybacking on those 55,000 is an additional 72,000. We call them shadow accounts because there are accounts that are using your service and not paying for it. Your potential is to take those 72,000 and convert them into paying subscribers.”
Softly, softly is the name of the game
Baider took great pains to point out that the question of enforcement is a delicate one, driven by individual company strategies, verticals and use cases, as well as cultural sensibilities. One size does definitely not fit all.
“I think the interesting part is that different customers, from different countries, different cultures will treat it differently. Some will be more delicate about it and don’t want to reset passwords, maybe just send [the subscriber] a message, but phrase it really nicely. Maybe add some limitations on the account. It depends on the organisation or the country and the culture, what they want to do, and how they want to do it.
From our perspective, we try to give them the tools [to identify] the cases, so the business can decide what’s acceptable, decide if it’s reasonable, decide when it crosses the line, and decide what the business wants to do about it”, he concluded.
Webinar moderator Keran Boyd, Research Analyst, Caretta Research wrapped the session up, agreeing: “I suppose ultimately, the more the industry starts to enforce these types of measures and share knowledge around the solutions, the more we can kind of come together with knowledge of how this works. I think a lot of this is based on assumptions that we’re making about our customers and how offended they might be…”
Catch the full IBC webinar ‘Converting Password Sharing into Subscriber Growth’, available on replay right now.
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