Sharing your Netflix password is a pretty common thing. I’ve used a friend’s account and a family member’s. A UK-based company called Synamedia, though, wants to hunt people like me down.
At this year’s CES, an annual trade show that presents new consumer electronics, UK-based company Synamedia unveiled a service called Credentials Sharing Insight (CSI) which uses artificial intelligence, behavioral analytics, and machine learning to track down password sharing.
A streaming service can integrate CSI with their user database and the software will look at a variety of factors – location of viewers, time spent viewing content, time content was accessed, type of content streamed, etc – to determine whether a password is being illegally shared amongst friends or family members who aren’t living in the same space. It then sends the streaming service a “probability score” that something illegal is underway. The service then determines what action to take. It can send an email offering a premium package with more sharing options or terminate an account, for example.
Netflix has acquired a $279 million debt and its highest reported free cash flow for a quarter is only $28 million, meaning that “the company’s cash expenses exceed annual incoming cash by billions of dollars”. This is because of the money invested in casting as wide a net as possible – buying the streaming rights to a lot of content, aggressively pushing for global expansion and investing in original programming. There’s still a lot of money pouring in and the company shows a yearly profit by dividing its debt over several years, but it is important that the number of subscribers keeps growing.
Password sharing raises legal and ethical questions about internet usage. Legally, federal rulings on password sharing remain murky and collective ownership of resources isn’t uncommon. People who subscribe to newspapers or magazines can pass them on when done with them without any moral queasiness. And in an era of increasing corporate powers, lovers, friends, or family members sharing passwords is one small act of individual control over a service that someone is paying for.
Then there is the problem of internet fraud, with Netflix login information being sold to thousands of customers. But in Synamedia’s own press release, “shut down large-scale, for-profit credentials sharing accounts” is an afterthought to “help streaming service providers combat the rapid rise in account sharing between friends and families and turn it into a new revenue-generating opportunity” which it bills as CIS’s main goal. Their research shows that “$9.9 billion of pay-tv revenues and $1.2 billion of OTT revenues” could be lost due to credential sharing by 2021.
If a crackdown on password sharing could potentially mean more income for corporations, what does it mean for those doing the sharing?
Yes, millennials are cutting the cables but they are also increasingly poor. It is not at all clear that they’d opt to pay for an account instead of just making do without one if their shared accounts are taken away.
There is the question of location too. I live in Pakistan, which has very low credit card density. I know maybe a handful of 20-somethings with credit cards of their own and those numbers plummet when you go down the economic chain. For many people in Southeast Asia then, paying for major Western streaming services isn’t an option.
While Asian-based companies like Iflix acknowledge this and seek to offer multiple methods of payment, through mobile phone balance, for example, major corporations like Hulu and Netflix aren’t doing enough to appeal to an Asian audience.
If password sharing is clamped down upon, many Asians may simply pivot to local services instead of splitting the cost between themselves under a single credit card holder’s account.
This is all hypothetical at this point. Netflix has reportedly told Irish media site JOE that it is “not working with/partnering with Synamedia” at this moment. Hulu and Amazon don’t seem very interested either.
Even if that is currently the case, CSI raises very important questions about the limitations and rights of internet consumers.