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Netflix May Be Losing $192 Million Per Month From Piracy, Study Claims (techcrunch.com)
An anonymous reader quotes a report from TechCrunch: As many as 1 in 5 people today are mooching off of someone else's account when streaming video from Netflix, Hulu or Amazon Video, according to a new study from CordCutting.com. Of these, Netflix tends to be pirated for the longest period -- 26 months, compared with 16 months for Amazon Prime Video or 11 months for Hulu. That could be because Netflix freeloaders often mooch off their family instead of a friend -- 48 percent use their parents' login, while another 14 percent use their sister or brother's credentials, the firm found. At a base price of $7.99 per month (the study was performed before Netflix's January 2019 price increase), freeloading users could save $207.74 over a 26-month period. At scale, these losses can add up, the study claims.
The report estimates Netflix could be losing $192 million in monthly revenue from piracy -- more than either Amazon or Hulu, at $45 million per month and $40 million per month, respectively. Millennials, not surprisingly, account for much of the freeloading. They're the largest demographic pirating Netflix (18 percent) and Hulu's service (20 percent). But oddly, it was Baby Boomers who were more likely to borrow someone else's account to access Amazon Prime Video. According to the study, 59.3 percent said they would pay for Netflix (or around 14 million people), contributing at least $112 million in monthly revenue, if they lost access. And 37.8 percent, or 2 million, said they'd pay for Hulu; 27.6 percent, or 1 million people, said they'd pay for Prime Video.
The report estimates Netflix could be losing $192 million in monthly revenue from piracy -- more than either Amazon or Hulu, at $45 million per month and $40 million per month, respectively. Millennials, not surprisingly, account for much of the freeloading. They're the largest demographic pirating Netflix (18 percent) and Hulu's service (20 percent). But oddly, it was Baby Boomers who were more likely to borrow someone else's account to access Amazon Prime Video. According to the study, 59.3 percent said they would pay for Netflix (or around 14 million people), contributing at least $112 million in monthly revenue, if they lost access. And 37.8 percent, or 2 million, said they'd pay for Hulu; 27.6 percent, or 1 million people, said they'd pay for Prime Video.
How is that piracy?
Netflix is DESIGNED with that in mind.
One Account, allows 1-4 "screens" to watch.
Netflix supports tablets, tablets are mobile.
Netflix supports phones, phones are mobile.
Children can't get their "own" netflix account, so they need to "share" their parents.
Some more examples of Piracy:
-Some people share a newspaper, that's piracy!
-Some people invite other people over to watch Netflix, that's piracy!
-Some people watch over the shoulders of people watching Netflix, that's piracy!
In the first place, the CEO of Netflix has stated that he considers account sharing to be an overall positive, not a negative.
Second, if Netflix wants to fix this "problem", it is completely within their power. Institute a single-stream HD plan (instead of the current single-stream SD plan), and many households will switch to it, instead of the double-stream HD plan. Or, Netflix could simply charge a fixed price per additional stream, in which case the owner of the account becomes moot.
Regardless, if I'm paying for a stream, why does it matter who I allow to use it? If that person hogs the stream and locks me out, that is no one's problem but mine. Either I change the password, or I buy another stream.
This assumes that 100% of the moochers would have paid for an account if they didn't mooch. I don't know what proportion of people would actually have paid for an account, but I'm guessing more than 10% and less than 50%? Still a lot, but the presence of that glaring error in the conclusions makes me wonder how much the study authors are biasing their assumptions to make the most headline-grabbing number possible, rather than engaging in a good-faith effort to find out how much money these companies are really losing.
Also assumes they someone didn't pay for the extra seats in the account. The way Netflix works is that you have to buy multiple seats, so ofcourse when you legally buy them, and then actually use them.. That shouldn't count as piracy, but now apparently does..
Watching things that are paid for, is now piracy....
Personally, I'm disappointed that Slashdot actually posted this.
So it seems that this isn't about piracy at all. Just account sharing, which is defined as "anyone who used a streaming service but did not pay for it". This would include ones parents, common law spouse, girlfriend/boyfriend, or sibling - collectively totaling over 60% of the Netflix account sharers. It doesn't really clarify how they determined if this was inside or outside the policy for the given service based on the definition I'd wager they simply didn't care.
How accurate this is depends significantly how the questions were posed. i.e. Saying "Do you pay for your own Netflix account or do you use someone else's?" could easily mean to someone who isn't violating the TOS
Also to those who are saying the implied claim is that 100% of the people who use someone else's credentials would buy their own. Apparently they asked the question "If you lost access to this credential would you get your own." For Netflix aboutt 60% said "yes" and this was used to determine the overall "cost" of account sharing.
My parents have Netfix, I have Prime, brother has HBOGo.
We all share.
What about people with multiple homes? I pay for my childrenâ(TM)s education. As far as I am concerned I have a house, a dorm room, and an apartment.
that it's assumed people not paying for it would actually pay for it? I see that's covered. How about this - maybe this study was done for some other reason, like to prop up stock prices? Or maybe drive them down a bit so someone can buy at a lower cost? nah, that would be wrong, they're good guys.... Oh look a squirrel.
Fat, drunk, and stupid is no way to go through life, son.
The friend doesn't own the content, he merely has a subscription to stream it. And I bet the terms & conditions have something to say about when and where sharing that stream is allowed; generally that only includes members of one household, or a limited number of devices. That's not an unreasonable limitation.
I can see both sides of this.
I mean, in the old days of VHS, if I leant my friend my VHS cassette, you would be hard pressed to say that he was "stealing the content."
On the other hand, some people stream Netflix for free because they can; some would probably pay for subscription, others probably wouldn't. My wife lets her mother watch Netflix on our account, her mother is well off and probably wouldn't think twice about paying for her own subscription if she couldn't use ours for free.
It is a grey area, and anyone who says it is "definitely piracy" or "definitely not piracy" is over simplifying. No one would say that a parent couldn't let their child use their account. What about when they're at a friend's house; or off to college... where do you draw the line.
Overall, I see this as not an issue for the courts but an issue for Netflix themselves. They already limit lines. We get two, so, if we're watching and the mother in law is watching no one else can. Netflix makes you pay for lines, so they can restrict you from going crazy and sharing with everyone you know. They might in the future use a technical solution to fix this.
"2 lines at a time" - but only if being channeled through the same router. They can cut off the grey area by policing it better themselves... but will customers be OK with that?
"That's the way to do it" - Punch
Netflix made 16 billion in profit last year. I wish that I could be "victimized" like that.
Playing devil's advocate; this is the feast before the famine.
There are a lot of Netflix wannabes. Disney, CBS, BBC, etc, are all pulling a lot of content off of Netflix. Netflix is a veritable wasteland of well-known content compared to what it was even three years ago, and it's only going to get worse. They're having to make their own stuff to maintain content.
I highly doubt Netflix are going to go under- but Netflix execs are probably looking at their cheques with concern- are their end of year bonuses going to be so well padded in 5 years from now? How are they ever going to be able to afford the bigger yacht if they lose half their marketshare in the upcoming years.
Netflix is bathing in money right now, but, it is potentially facing a less rosy future. They're not going to become the next blockbusters and disappear, but they may not dominate the landscape in the near future either. They're looking for ways to scrape the barrel.
"That's the way to do it" - Punch