Password sharing for streaming services by the customers didn’t go well with Charter. Thomas Rutledge, the CEO at Charter Communications was fed up with the Spectrum password sharing by the users to let their non-subscribing family members and friends avail the television streaming services and promised to bring a crackdown on this practice industry-wide in 2018. “There’s lots of extra streams, there’s lots of extra passwords, there’s lots of people who could get free service,” said Rutledge during an industry conference.
Password sharing was limited to the streaming services like HBO, Netflix, Hulu, and Showtime but the unauthorized use of the services by non-subscribers was allegedly exploded after the cable service providers opened up their TV Everywhere services that allow users to enjoy the services outside of their home.
You can easily understand it with three typical tweets. One seemed to be trading for the Spectrum TV user credentials while another had thanked a friend of him for sharing his Spectrum TV user ID and password for unlocking a channel broadcasting the World Series. In the third one, he anyhow hacked his parent’s Spectrum account credentials and enjoyed watching cable TV free of cost. Rutledge went on to complain that sharing of passwords was so widespread, one unnamed network allowed 30,000 streams simultaneously with a single user’s login credentials. Rutledge strongly felt that many non-subscribers were enjoying Spectrum TV streaming and other services because of this practice.
According to Bloomberg News, there were divergent opinions about password sharing and its impacts. Few employees at Time Warner, Inc., that owns Turner and HBO Broadcasting, had shared their views over the password sharing, saying it was a perfect way to introduce future customers to their streaming services and eventually make them the paying subscribers.
Cable TV password sharing “is still relatively small and we are seeing no economic impact on our business,” stated Jeff Cusson, an HBO spokesman.
But, a narrative evidence at ESPN, which is owned by Walt Disney Co., shows that millennials don’t have any moral dilemma while sharing their user credentials, even with strangers. Strange, isn’t it? At one focus group that targeted younger sports fans only, all the 50 participants had raised their hands after they were asked whether they shared passwords, as per Justin Connolly, who is executive VP for sales and marketing at ESPN.
“It’s piracy,” said Connolly. “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.”
The “authenticated subscriber” concept of TV Everywhere had traditionally required its customers to re-enter the user ID and password at least once in a year for each authorized device, although few cable operators ask their subscribers to re-enter the credentials on a monthly basis, and discontinue access actively as soon as possible in case the customer cancels or downgrades the cable television service.
Many cable companies offer their own on-demand streaming service and live streaming apps. Some put a limit at the number of channels to be viewed outside the home and restrict multiple streaming by multiple users concurrently. But most of the cable TV providers that support authentication prefer to not to limit concurrent streaming and put generous limits on the number of services to be streamed simultaneously using a single account.
Charter decided to take the lead and demanded cable TV service providers to restrict their TV apps and online streaming to restrict password sharing. There were some of the most difficult negotiations past fall between Viacom and Charter. Viacom, who is the owner of MTV, Comedy Central and Nickelodeon, almost forced Charter to restore again its basic cable TV networks to “Select” cable TV, that was Spectrum’s entry level package. In 2016, several Viacom networks had been pushed too much expensive Gold pack, that meant significant losses of audience as Bright House and Time Warner Cable customers started switching to Spectrum’s TV plans.
Viacom had successfully negotiated its networks’ transition back to its Select TV plan starting in January 2018. But online viewing platforms of those networks and their apps then included stream limitations in order to keep the password sharing and concurrent viewing to a minimum.
ESPN, which had been dropped from that lineup in terms of trimmed-down cable TV packages, had also experienced a lot of password sharing, and had begun putting a limit on the number of concurrent streams allowed per user. Originally, one could launch 10 simultaneous streams using one account. That number had then been reduced to half that was five. And not just this, the sports network was further considering reducing its stream limit to 3 simultaneous sessions.
Park Associates, a research group had estimated that around one-third of Internet-only users were streaming cable TV networks and other services using another subscriber’s user credentials. They estimated that the cable TV industry would be losing around $3.5 billion due to unauthorized access that year, that would further rise to around $9.9 billion by the year 2021.
Companies such as Adobe Systems then began selling their services to these cable TV providers which could track the unauthorized use of user IDs and passwords along with the location of the persons accessing online streams. The companies suggested that cord-cutting had given rise to unauthorized viewing because customers were getting access to cable TV services for free.
Most of the sharing of user credentials seemed to be happening among friends and family members, especially children who were away from home. After that, most of the cable TV executives were fine with in-family sharing of credentials. What bothered them most was when the passwords were further shared among friends or purchased by strangers. It was uncertain if the customers were always aware that the user credentials were being traded or sold by any third party. When a cable TV account with no streaming activity suddenly generated 50 concurrent streams in several states, anyone would usually suspect it to be hacked by some unknown party.
Well, the cable industry remained undecided about the exact number of concurrent streams that were appropriate to be allowed for the customers. After that, Netflix allowed between one to four streams, as per the plan chosen. HBO permitted three concurrent streams, DirecTV then allowed two and DirecTV’s satellite customers could get a maximum of five streams.