If you’re a Netflix user, you’re probably still bummed out that the company is raising its streaming price on its HD plan by $1 to $9.99 per month within the next year. But if you’re thinking about splitting that account with a friend or family member, just know that you may be committing some light piracy.
An article from MarketWatch provided a note to investors Goldman Sachs Analyst Heath Terry, which indicated a specific intent when targeting the HD plan:
We believe a targeted price change like this is designed to reduce excessive password sharing by incentivizing users to switch to the 1-screen plan.
It is true that, right now, the single screen streaming plan and the two-screen HD plan are both priced at $7.99. But is password sharing outside of the home really a piracy threat to major companies like Netflix?
The answer is actually no, but that doesn’t mean it’s not prevalent. According to a study done by Parks Associates earlier this year, 57 percent of U.S. households access an over-the-top video account — meaning streaming services like Netflix, Hulu, or HBO Go — but 11 percent of Netflix subscribers, 10 percent of Hulu Plus subscribers and 5 percent of Amazon Prime Instant Video subscribers are using an account paid for by someone else.
Unsurprisingly, young adults between 18-24 are the biggest perpetrators of the password-sharing trend, as 22 percent of those surveyed admitted to using an account that was not theirs.
In a related study, Parks Associates estimates that “illicit password sharing” could cost the industry as much as $500 million per year.
So is the price hike really all about password sharing? If Netflix CEO Reed Hastings’ past on-the-record comments about the practice still have any weight, the answer is likely no. But that doesn’t make it a practice that is condoned by these companies.
Sharing passwords with friends, even if it’s just to watch the latest episode of ‘Game of Thrones,’ is piracy in a very marginal form. But it still is a gray area that could see more examination as we move closer to an age where cord-cutting is the norm and these subscriptions compose nearly all of modern media consumption.
➤ Why sharing your Netflix password is considered piracy ‘lite’ [MarketWatch]