NEW YORK • A coalition that includes Netflix, HBO and cable-industry titans is stepping up efforts to crack down on password sharing, discussing new measures to close a loophole that could be costing companies billions of dollars in lost revenue each year.
Programmers and cable-TV distributors are considering an array of tactics to cut off people who borrow credentials from friends and relatives to access programmes without paying for them. The possible steps include requiring customers to change their passwords periodically or texting codes to subscribers' phones that they would need to enter to keep watching.
Some TV executives want to create rules governing which devices can be used to access a cable-TV subscription outside the home. While someone logging in from a phone or tablet would be fine, someone using a Roku device at a second location could be considered a likely freeloader, one person said. If none of those tactics work, pay-TV subscribers could be required to sign into their accounts using their thumbprints.
Charter Communications' CEO Tom Rutledge said last month: "It's just too easy to get the product without paying for it."
But taking more aggressive measures poses risks. The people using services for free - especially younger consumers - may never agree to sign up for a subscription, no matter how many hassles they endure. That means companies would mostly just be alienating paying customers, who could get frustrated and stop using an app or cancel their service.
The industry is projected to lose US$6.6 billion (S$9 billion) in revenue from password sharing and piracy this year, according to research firm Parks Associates. By 2024, that could grow to US$9 billion, it said.
Two years ago, some of the biggest names in entertainment and technology formed the Alliance for Creativity and Entertainment, which was devoted to reducing online piracy. Last month, the group turned its attention to password sharing. Participants include Netflix, Amazon.com, Walt Disney, Viacom, HBO, Comcast and Charter.
While industry executives widely agree password sharing is a problem, there is no consensus on where to draw the line. Programmers and distributors blame each other for being too lenient on how many people can simultaneously stream from one account.
Three years ago, Netflix chief executive Reed Hastings said password sharing is "something you have to learn to live with, because there's so much legitimate password sharing - like you sharing with your spouse, with your kids".
Last month, Netflix chief product officer Greg Peters said it is seeking "consumer-friendly ways to push on the edges of that" situation.
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