The sharing of passwords for Netflix, Hulu, HBO Go, and other platforms, is putting a huge strain on the current streaming business plan. It is has been reported that 35 percent of millennials are sharing their login information compared to 19 percent of Generation X and 13 percent of the Baby Boomers. As a result, some of the streaming platforms are losing out on hundreds of millions on revenue. According to recent studies, Hulu loses over a $1 billion a year because of sharing passwords.
A new study has found that the sharing of streaming platform passwords is getting worse as time goes on. While millennials currently make up for 35 percent of the problem, it's believed that the upcoming "post-millennials," who are 21-years of age and younger, will make up for 42 percent of users who share their credentials. In today's world, users want things as quickly as possible and don't really seem to care where the content comes from or if it was paid for. But, there is also some psychology around the sharing of passwords.
It is believed that the sharing of streaming platform passwords can bring friends and family members closer together. Sudeep Bhatia, a professor of psychology and marketing at the University of Pennsylvania, says that sharing passwords is usually unlikely to change viewing habits. Instead, he says that sharing login credentials, "triggers reciprocity motivations and strengthens our relationship." For others, it seems that millennials and the generation below just don't want to pay for the services. There are stories of girlfriends and boyfriends still using their exe's login long after a relationship has gone south or some that just still use the login of their parents.
While the sharing of passwords is having a negative effect on the streaming platforms, most of them aren't really implementing a strategy to combat it. In 2016, Netflix said that the sharing of passwords was not hurting their business in the slightest and HBO said the same in 2014. Both companies believe that the sharing of passwords can actually lead to more revenue down the line when new users see what they have to offer. However, it is estimated that streaming platforms are losing hundreds of millions per year, due to the sharing of login credentials.
Netflix has implemented multiple streamer services to subscribers, which is aimed at families, but also extends to close friends. Users are limited to how many people can stream at the same time, which is something that more platforms should start implement in order to earn some more money per year. None of the streaming platforms are really policing who is sharing with who, so until that happens, it will remain to be the Wild West in terms of the sharing of passwords for millennials and post-millennials. More than likely, the price for these services will go up as a result of the record numbers of people who share credentials. This news was originally reported by CNBC.