Cable Sector Likely To Freak Out At New Service That Streamlines Streaming TV Password Sharing

from the you-made-this dept

Streaming video providers like HBO and Netflix have traditionally taken a lax approach to password sharing. Netflix CEO Reed Hastings has gone so far as to say he "loves" password sharing, and sees it as little more than free advertising. Execs at HBO have similarly viewed password sharing in such a fashion, saying it doesn't hurt their business. If anything, it results in folks signing up for their own accounts after they get hooked on your product, something you'll often see with kids who leave home, or leave college and college friends behind.

The traditional cable industry sees things quite differently. Executives at the nation's second-largest cable company (Spectrum), for example, have called the lax attitudes toward password sharing "insane," and have frequently (and falsely) claimed that the practice is akin to "piracy." In response they've been trying to build a new coalition tasked with taking aim at what they see as a diabolical menace.

A new service being launched this week should provide some fuel for those endeavors. DoNotPay is a startup that revels in helping consumers take counter-advantage of US corporations' automated customer service systems, offering users services like a fast-food receipt scanner that will automatically fill out surveys for free food, an automated system for securing refunds for crappy WiFi, or a service that lets you auto-contest parking tickets. Their latest offering is Chrome extension that lets users share their streaming service access without actually sharing your password:

"By installing the startup’s free Chrome extension, you can generate links that other people can use to access your subscriptions. Instead of sharing the actual password, DoNotPay uses cookies to transfer your browsing session to other users’ computers, effectively fooling services such as Netflix and Hulu into thinking you’ve just logged in through another Chrome tab. I’ve tried it, and it works as advertised."

One can already hear the hyperventilation and histrionics coming from the cable sector, who'll be sure to be write a few legal nastygrams to the company for its latest end-around of automated systems. But the company is simply responding to a growing problem among streaming services we've highlighted repeatedly: as companies strive to lock down content into a growing array of exclusivity silos, consumers are finding it harder and harder to find all the content they're looking for, and afford the number of services needed to do so. As such, they're more likely than ever to revert to piracy or embrace a service like this one:

"Joshua Browder, DoNotPay’s founder and CEO, says the subscription sharing feature is a response to the proliferation of streaming services that each have their own exclusive content silos.

“It’s ridiculous,” Browder says. “You shouldn’t have to pay $100 a month just to access what you could get before for much cheaper.”

So while the cable and streaming industry will freak out about this service, they probably won't spend too much time realizing that they're the ones responsible for it. To be clear, this isn't some apocalypse, and, in many ways, streaming has fixed a lot of what's wrong with the traditional cable sector, delivering greater flexibility at lower cost.

That said, endlessly confusing and ever-shifting licensing agreements, combined with the rise of more than two-dozen streaming exclusivity silos, is still a problem the industry should be paying attention to:

Right now, the industry's just running to the streaming trough without thinking much of the impact. Eventually however they'll have to do a better job building more centralized systems with a focus on cost and simplicity, without simply repeating the historical failures of the cable sector.

Filed Under: chrome extension, password sharing, streaming, tv
Companies: donotpay, hbo, netflix

AT&T Can't Get Out Of Its Own Way As It Tries To 'Disrupt' Traditional TV

from the meet-the-new-boss... dept

So we've noted a few times how giant telecom providers, as companies that have spent the better part of the last century as government-pampered monopolies, are adorable when they try (then inevitably fail) to innovate or compete. Verizon's attempt to pivot from curmudgeonly old phone company to sexy new media darling, for example, has been a cavalcade of clumsy errors, missteps, and wasted money.

Much like that time Verizon tried to launch a "tech news" website that banned reporters from talking about net neutrality or government surveillance. Or the time it launched a Millennial-focused video streaming service nobody wanted to watch. Or the time it bought Tumblr (via Yahoo), banned porn, watched everybody leave, then had to sell the whole thing for a song.

AT&T hasn't been much better as it has tried to "disrupt" the TV space. You'll recall the company spent more than $150 billion to acquire Time Warner and DirecTV in a bid to dominate streaming and the online video advertising space. But the deals saddled AT&T with so much debt, it forced the company to raise rates despite rising competition, driving many of these customers to the exits. AT&T also launched a rotating array of video brands (more than 7!) that were so confusing, it even dumbfounded the company's own customers.

Hoping to right the ship, AT&T this week launched another variant of its streaming video platform. Despite the fact that US consumers are clearly tired of proprietary cable boxes, sneaky fees, and quickly-ballooning promotional rates, AT&T apparently thought it would be a good idea to "compete" in the streaming space by launching a platform that incorporates all three:

"After 12 months paying the promotional rate, you pay the "prevailing rate," which is double or close to double the first-year base rates before taxes and fees. Under current prices, the $49.99 promotional rate for the entry-level "Entertainment" package would rise to $93 per month in the second year. The promotional $54.99 rate for the Choice plan would double to $110; the $64.99 promotional rate for the Xtra package would rise to $124; and the $69.99 promotional rate for the Ultimate package would rise to $135.

Those prices do not include an $8.49 per-month fee for regional sports networks, which applies to the Choice, Xtra, and Ultimate packages.

It's just astonishing to watch a company that has been bleeding subscribers by the boatload survey the market, carefully consider its next steps, then double down on all of the annoying shit that brought them to this point:

"Signing up for AT&T TV requires a two-year contract, with an early termination fee of $15 for each month left on the agreement at the time of cancellation. A $20 activation fee is waived if you order online...Each customer gets one Android-powered AT&T TV device and a Google Assistant-powered voice remote included in the plan, but you have to pay $120 for each additional TV box.

Telecom has long proven to be a pretty insular industry, with executives that tend to surround themselves with yes men who applaud every misstep. It's reflected in the telecom policy analyst and think tank space, and the revolving door regulators that pass from telecom to governance. They literally can't see how clumsy monopoly dominance has frustrated consumers, broken the market, and resulted in high prices, terrible service, and a cavalcade of bad ideas. As such, they literally can't see the best way to appeal to these users either, because to them...there's no problem that needs fixing.

Filed Under: at&t tv, disruption, streaming, streaming video, tv
Companies: at&t

Google Stadia Lacks Games In Its Library, Isn't Shelling Out For New Games

from the failure-to-launch dept

This Google Stadia thing is starting to move into full on failure to launch territory. If you're unfamiliar with the Stadia product, it was pitched by Google as essentially the end of console gaming. Something like trying for "the Netflix of gaming" moniker, the idea is that Google would stream games for a monthly fee, freeing gamers from the need of having dedicated gaming hardware in their homes. The initial launch of the product was met with a public mostly uninterested in or skeptical of the service. Add to all of that the problems the platform had accepting new gamers, what looks like very real resolution issues with how games are delivered visually, and Stadia's problems getting gamers to "buy in" to the platform more recently, and it's all looking to be something of a disaster.

It's not the most public problem Stadia has had thus far, but yet another issue is the empty shelves in Stadia's library of games. Right now, less than 30 games are on offer, which isn't exactly the sort of library that gets gamers to give up their consoles. What's worse, based on feedback gathered from game developers, Google doesn't appear to be terribly interested in enticing more publishers onto its platform.

As reported by Business Insider, many developers have explained that one of the biggest reasons indies have mostly stayed away from Stadia is the lack of financial incentive from Google. One executive at a publishing company described the amount of money that Google was offering to them as “so low” that it wasn’t even part of the conversation. Another indie dev described how most platform owners, like Microsoft and Epic, offer upfront incentives to entice developers and publishers to create or release games on their stores. But with Google Stadia the incentive was, in the words of that dev, “...kind of non-existent.”

For its part, Google is insisting it's going to increase its game library four-fold. For developers to come out and publicly discuss their reasons for not getting on board, however, and for those reasons to be the incentives for doing so, this really is starting to feel like one of those Google products that never achieves exit velocity. Everyone remembers Google Plus, for instance, where the company rolled out what was supposed to be a Facebook-killer, but never really backed that claim up with the attention a goal like that would deserve and require.

Public comments like that are only going to compound the lack of incentives for publishers to be on Stadia and create even more trepidation for getting on Stadia. And if the games library never really takes off, neither will Stadia as a whole.

Filed Under: stadia, streaming, video games
Companies: google

Many of Cable TV's Dumbest Habits Will Make The Leap To Streaming

from the meet-the-new-boss... dept

In many ways, the streaming TV revolution is finally delivering many of the things that consumers had been begging for for years -- more flexibility, better customer service, and cheaper overall packages. Thanks to increased competition, streaming is finally forcing the sector to adapt and actually listen to customers. At least for now, when a flood of competitors are jockeying for market share.

At the same time, many of the same annoyances that have frustrated consumers for years will also be making the jump to streaming, including a steady parade of price hikes with little in the way of notable improvements for your purchasing dollar. Annoying "retrans disputes" -- where a broadcaster and cable TV provider will bicker over programming and blackout out user content (without refunds) in the process -- have also come along for the ride. That's before you get to ISPs abusing their monopoly power over broadband to disadvantage competitors, the whole reason for the entire net neutrality fracas.

As the EFF's Katharine Trendacosta correctly notes at Slate, in many ways as the streaming sector consolidates into a few powerful players, consumers will slowly find they've traded in old cable TV channel bundles for entirely new "vertical" bundles:

"Instead of the old horizontal bundling—in which cable companies packaged a bunch of channels together so that people paid for some things they weren’t going to watch to get what they were—the new bundling is going to be vertical, where you pay for internet and get a streaming service in return. It’s not just Comcast that’s doing this. AT&T owns HBO, and it’s going to give premium AT&T mobile and broadband customers HBO Max (not to be confused, although you could definitely be forgiven for doing so, with the existing HBO Go and HBO Now apps) bundles at no extra charge."

AT&T owning both the content and a monopoly over internet access creates a universe of problems, most of which were discussed at the Time Warner merger trial, and then promptly ignored by a comically myopic judge. Layer in the FCC's decision to kill most of its consumer protection and net neutrality authority over these growing giants at lobbyist behest (not to mention the endless rubber stamps for megamergers), and it shouldn't be too difficult to see how the new streaming sector will slowly but surely start to look more and more similar to the cable TV offerings we thought we were escaping from.

Ironically the flood of choice in the streaming wars to come (in which too many exclusives are siloed behind too many paywalls) also risks driving users back to piracy, something we've been noting for a while:

"Now, instead of paying one cable bill for all the channels, the ones we want and those we don’t, we’re paying for countless individual services just for the one or two programs or movies we want to watch on each of them. And that will bring back piracy, which is bouncing back after having been on the decline for years.

The return to piracy is both a bit of a meme and a bit of a reality. And its return is absolutely the result of a market that giant companies have built to intentionally trap customers into either a single-company ecosystem (one ISP, one easy streaming service) or an annoying, expensive patchwork. And while piracy signals discontent with the system, it’s quite unlikely that these companies will react by changing their approach, let alone lowering prices.

If history is any indication, giants will slowly come to dominate streaming through mergers, anti-competitive behavior, and wealth. There are ways America could fix this (stop rubber stamping mergers, encourage more broadband competition, pass some modest net neutrality and privacy rules protecting consumers from monopolistic behavior), but we're currently doing the exact opposite. As giants like Comcast NBC Universal, Amazon, and AT&T Time Warner consolidate their power, they'll engage in all the same lessons of years gone by. When consumers revolt and piracy rates soar as a result, they'll blame everybody (copyright infringers!) and everything (VPNs!) else for the avoidable problems they created.

Filed Under: competition, piracy, price hikes, streaming, tv

Xbox Chief Says Its Main Competitors Are Now Google, Amazon Rather Than Sony, Nintendo

from the not-so-sure dept

There are great rivalries in this world. The United States and Russia. The Yankees and the Red Sox. All of us and our mothers-in-law. And, in the gaming space for over a decade, there has been Microsoft and Sony. Since the Playstation 2 v. Xbox iteration of this, Sony and Microsoft have gone head to head in the console wars, with Nintendo also filling in some more niche-style gaming needs. The last battle in this war, the Playstation 4 v. the Xbox One, quite famously went in Sony's favor, with Microsoft having a disastrous pre-launch PR nightmare and sales numbers that ultimately saw Sony never once trailing its chief rival.

And yet, as Sony has announced its forthcoming Playstation 5 console, the man in charge of Microsoft's Xbox product recently stated that Google and Amazon are its competitors now, not Sony and Nintendo.

Microsoft’s head of gaming and Xbox, Phil Spencer, has revealed that the company sees Amazon and Google as its main competition for the future. Speaking in an interview with newly launched technology publication Protocol, Spencer dismisses Sony and Nintendo’s ability to create a cloud infrastructure that will challenge Microsoft, Google, or Amazon.

“When you talk about Nintendo and Sony, we have a ton of respect for them, but we see Amazon and Google as the main competitors going forward,” says Spencer. “That’s not to disrespect Nintendo and Sony, but the traditional gaming companies are somewhat out of position. I guess they could try to re-create Azure, but we’ve invested tens of billions of dollars in cloud over the years.”

This, of course, all revolves around game streaming services and gaming-as-a-service platforms. Spencer appears to indicate that such services are the way gaming will be done in the near future and Microsoft is somewhat uniquely positioned among the traditional console rivals to dive into that market, with the built out Microsoft Azure platform backing them. Sony and Nintendo aren't likely to be able to build out their own infrastructure to rival Azure, and would instead have to partner with another company. Except that Amazon and Google are the likely candidates for that and Google has its own Stadia product in place, despite its ongoing problems.

But the real question is: Is Spencer right to bet on game streaming as the wave of the future? There are real roadblocks in its way. Google is not without resources and its Stadia product both hasn't lived up to expectations and has poisoned the well to at least some extent with the public. Those bad impressions may not last forever, but certainly it doesn't look like game streaming is going to be ready for prime time in this console cycle. Add to that the woeful state of broadband internet in America, not to mention how a lack of competition has allowed providers to put data caps in place, and you very quickly have to wonder if game streaming has an underlying American infrastructure problem that it can't possibly solve.

You have to wonder too if Spencer is hedging his bets with all of this in preparation for losing yet another battle in the current console wars.

Cloud gaming still seems like it’s in the distant future, especially as Sony and Microsoft prepare to launch the traditional PlayStation 5 and Xbox Series X consoles later this year. Both next-generation consoles will go head-to-head throughout the important holiday season, and Nintendo is still seeing positive growth with its Switch sales, thanks to the new Switch Lite.

If past is prologue, you would expect Sony to rush into the next battle in a strong position compared with Microsoft. If that occurs, Spencer probably better be right if he's going to bet on game streaming.

Filed Under: competition, playstation, stadia, streaming, video games, xbox
Companies: amazon, google, microsoft, nintendo, sony

Smaller Cable Companies Are Giving Up On Cable TV Altogether

from the unsustainable dept

As giants like Amazon, Apple, AT&T, and Comcast rush to dominate the TV market, smaller cable providers are suddenly finding themselves unable to compete. Pay TV margins have been tightening for years, and without the kind of scale enjoyed by companies like AT&T/DirecTV/Time Warner or Comcast/NBC Universal, smaller cable companies have warned for years how they would probably have to ditch the TV business and focus exclusively on broadband.

Some companies, like Kansas cable TV provider Rainbow Communications, are finally following through on those promises. The company sent a letter to its customers this week (hat tip, Cord Cutters News) informing them they'd be shuttering their cable TV operations, and suggesting impacted customers should probably go check out this whole streaming video thing:

"You’ve probably heard about streaming TV. Streaming is watching TV over your internet connection, and now with new applications, you can stream shows on television sets. While Rainbow will not be your TV provider moving forward, your new digital picture and sound can be delivered over our Rainbow internet service. When you combine our high-speed internet with HD-picture, the clarity will surprise you.”

It's the beginning of what's expected to be a fairly ugly shake up as the long-unsustainable pay TV sector transitions from "wink wink" competition to a new streaming video fist fight. Gone are the days where cable TV providers could neglect customer service and charge $130 a month for a bundle of 500 channels nobody actually watched. Under the new reality, margins are tight as hell, and unless you're doing double duty as a cable provider and broadcaster, you're not going to have the scale to be able to compete with massive giants with the leverage of scale.

But good news (for them)! Because U.S. broadband is so painfully uncompetitive, most of these smaller cable companies can shift entirely to broadband, where they can raise rates largely with impunity. They can also impose arbitrary and unnecessary usage caps and overage fees, letting them both jack up the cost of broadband service, and cash in on the streaming video services they're now pushing captive broadband customers to. That same lack of competition will also let them ignore the abysmal customer service the cable sector is historically known for.

In other words, most of these companies can simply pivot from overcharging you for cable TV to overcharging you for cable broadband, while saving costs on program carriage fees and traditional cable infrastructure.

Filed Under: cable tv, competition, cord cutting, over the top, streaming, tv
Companies: rainbow communications

AT&T TV Service Goes Dark On Roku As The Streaming Wars Get Stupid

from the meet-the-new-boss dept

For years cable customers have been plagued by content blackouts as cable providers and broadcasters bicker over new programming contracts. So called "retransmission feuds" usually go something like this: a broadcaster demands a cable company pay twice as much money to carry the same content. The pay TV provider balks, and blacks out the aforementioned content. Consumers spend a few months paying for content they can't access, while the two sides bitch at each other and try to leverage consumer anger against the other guy. After a while a new confidential deal is struck, and customers face a higher bill with little to show for it. Rinse, wash, repeat.

While some might think the innovative streaming revolution is going to fix stupidity like this, evidence suggests that's not likely. This week, AT&T's creatively-named streaming app, AT&T TV Now, was unceremoniously pulled from all Roku streaming hardware after a contract between the two companies expired and they couldn't agree on a new one. As a result, existing users can still access the AT&T streaming apps on the platform, but any new AT&T TV subscribers will suddenly find the app won't work on the most popular streaming platform on the market:

"AT&T may ultimately hurt more than Roku from the dispute: Roku is one of the top streaming hardware devices in the United States, with around one in four homes picking it over similar devices offered from Apple and Amazon. On the other hand, AT&T has been losing ground to startup services like YouTube TV, Hulu with Live TV and Fubo since the company nearly doubled its subscription fee since it launched a few years ago."

It's possible the stand off involves a dispute over revenue from collected consumer data, given AT&T's ambitions in the video ad space. But, just like the retrans fights of old, nobody's actually willing to say what the problem is, because consumer welfare (as usual) is a distant afterthought. AT&T's website statement to consumers is murky at best on what caused the blackout and when it might get resolved:

"Starting January 1, 2020, you won’t be able to add the AT&T TV channel to your Roku device. Already have AT&T TV on your Roku device? You can keep using it as long as you don’t delete the app. We’re actively working on a new agreement with Roku and hope to resolve this soon."

In the interim, users who just got a shiny new Roku for Christmas and already pay AT&T for TV services are just shit out of luck, sorry. When you combine retrans fights with these new hardware/app maker feuds, one gets the impression these kinds of standoffs are only going to get dumber. In its fight over TV rates with Cablevision in 2010, News Corporation got Hulu to block Cablevision broadband customers from accessing all Fox content. Viacom did something similar in 2014 when it blocked all CableONE broadband customers from accessing Viacom content online, even if those broadband users were paying for TV from another provider.

US regulators generally don't step into these kinds of feuds, viewing them as little more than gentlemanly debates, even if consumers are getting the short end of the stick. Given the FCC all but obliterating its own authority over telecom and cable at lobbyist behest, and the number of companies all vying for exclusive access to consumer viewing data and control over your viewing hardware, you can probably predict this kind of stuff is only going to get dumber in the next few years.

Filed Under: blackouts, contracts, streaming
Companies: at&t, roku

Disney+ Titles Disappear Without Warning, Bringing Confusion To The Streaming Wars

from the here-today,-gone-tomorrow dept

While there's little doubt that cheaper, more flexible streaming TV options are a definite step up from overpriced cable TV channel bundles, we've noted for a while how there's a problem in the sector it hasn't spent much time thinking about. As companies rush to lock down your favorite content via exclusives, users are increasingly being forced to hunt and peck among rotating catalogs to find the content they're looking for. Want to watch Star Trek? You'll need to subscribe to CBS All Access. Want to watch The Office? You'll need to subscribe to Comcast's streaming service. Friends? You'll need AT&T.

The one two punch of ever shifting licensing deals and exclusives, shared among more than a dozen different services, risks over-complicating finding the content users are looking for. Push this particular idea too far in that direction, and consumers are going to simply pirate -- an ironic outcome to a decade spent trying to migrate pirates to legit streaming alternatives.

Case in point: Disney has done amazing work driving new users to its Disney+ streaming service with low(ish) price point and exclusive programs like The Mandalorian. But users this week began noticing that movies that were on the service just last month are already falling out of rotation, without users being notified that they were disappearing:

"...as 2020 began, some Disney Plus users noticed that a few films had gone missing from the streaming library.

Dr. Dolittle, Pirates of the Caribbean: On Stranger Tides, Home Alone and Home Alone 2, and The Sandlot are no longer streamable on Disney Plus. All these titles disappeared without warning, and so far, Disney has not commented on the titles.

Many fans are surprised by films dropping off the service, particularly since Disney hasn’t issued press releases about the changes. Where companies like HBO and Netflix put out monthly bulletins of everything coming to and leaving their streaming services each month, so viewers can plan their last-minute binges, Disney has only emphasized new arrivals, not departures.

To be clear this isn't the end of the world, but it does create a level of consumer annoyance that, if driven at too large of a scale, could drive users back to pirating content. Eventually the industry needs to work in collaboration to make it easier to subscribe and unsubscribe from numerous services, track which services you're subscribed to, clearly notify users when content licenses expire, and make it easier to search across multiple platforms to find particularly content.

Ignore the lessons of the past (that piracy is a competitor and a meaningful metric of potential customer dissatisfaction), and the sector is going to relive it. At which point you can easily see the industry blaming everything but its itself ("we gave you everything and you still pirated you ungrateful wretch") for customers who drift back to piracy.

Filed Under: disney plus, exclusives, movies, silos, streaming
Companies: disney

Google Stadia's Claims For Streaming In 4K Seem... No, Just No

from the like,-really-no dept

Google's Stadia product, the company's bid to get gamers to give up their consoles and PC rigs and instead partake in Gaming as a Service, has had a rocky rollout to say the least. The service was already up against America's pathetic broadband coverage and usage caps. Add to that the quite muted applause that came from press and public reviews, not to mention the Obamacare-like rollout of the product, and you have to wonder if this is the kind of hit to a product's reputation that is at all recoverable. It's nearly as though Google developed a list of things that are important to gamers specifically and went out of its way to ensure it would get failing grades on each item.

The latest issue is no different. To combat concerns about how streaming games would behave in terms of quality, Google made claims that the service would stream games in 4k resolution and at 60 frames per second. Reality, it would seem, doesn't line up with those claims.

Google’s Phil Harrison explicitly said that all games will be running at 4K 60fps, but Destiny 2 and Red Dead Redemption 2 simply don’t. Rather, they’re upscaled to meet that. Worse yet, there was a tweet that seemingly confirmed Red Dead Redemption 2 would run at 4K, but that tweet was swiftly deleted. Presumably Google was quick to prevent what would have been a blatant lie from being on its account knowing that the game was at a lower resolution.

Since the first reveal of Stadia, Google has bragged about the powerful hardware running the service and how it can handle 4K at 60fps without breaking a sweat, even leveraging multiple instances to better improve the quality. So far, though, we’ve yet to see Stadia actually pulling that off. If the company had said that some games ran at lower resolutions and relied on upscaling or even pushed the underlying hardware prowess less, this would be less of a problem. The same would apply if the settings these games run at on Google’s end were disclosed more obviously.

After the 9to5google.com post was initially published, Google reached out to them to clarify the whole situation. That clarification amounted to Google again stating that Stadia can run games at 4k and high frame rates, but that Google also gives publishers flexibility on how to deliver the streamed game to allow for the best experience, similar to how other streaming game services do.

There are a couple of problems with Google's pushback. First, it was Google that made the blanket claim about the resolution and frame rate Stadia would run at. To now clarify that by stating that developers can stream their games in other resolutions, or upscale them to 4k, deviates from that selling point. Disappearing tweets with similar claims only adds to the impression that all of this amounts to false claims to generate sales.

Second, whatever the specifics in Google's clarification, games that were promised in 4k instead look like muddled heaps of trash.

There is a great deal more in terms of images on Twitter comparing on-prem and streaming graphics. This, again, is another one of those things you cannot get away with when it comes to serving the gaming public. It's not as though it were some kind of secret that gamers really, really care about graphics and production values. A pitch to ditch a console or PC for versions of games that run more slowly and at lower graphical quality is a complete non-starter.

Much of the press for Stadia seems to conclude that game-streaming of this kind is a great idea that will eventually be awesome, but that Google is probably a handful of years too early with all of this. The real question, it seems, is whether Google has torpedo'd its reputation in this market to the point that it won't be able to sell this product even when it is ready.

Filed Under: 4k, stadia, streaming, truth in advertising, video games
Companies: google

Netflix Starts To Harden Its Stance On Password Sharing

from the bigger-and-dumber dept

For years now, streaming video providers like HBO and Netflix have taken a relatively lax approach to password sharing. Netflix CEO Reed Hastings has gone so far as to say he "loves" password sharing, and sees it as little more than free advertising. Execs at HBO have similarly viewed password sharing in such a fashion, saying it doesn't hurt their business. If anything, it results in folks signing up for their own accounts after they get hooked on your product, something you'll often see with kids who leave home, or leave college and college friends behind.

But some recent shifts in the sector suggest that may soon be changing. HBO was bought by AT&T, which tends to have a more...monopolist-esque mindset when it comes to making consumers happy. And as Netflix has grown larger and more powerful, many of its more consumer friendly positions (like oh, supporting a healthy open internet) have fallen by the wayside. And there's a growing coalition--spearheaded by Charter CEO Tom Rutledge--that is intent on portraying a fairly limited password sharing problem as "insane" and "piracy."

Rutledge, whose "get off my lawn" rants on this subject have been going on for years, has spearheaded the rise of the "Alliance for Creativity and Entertainment," an organization Charter, AT&T, and Netflix all belong to. As that coalition has made cracking down on password sharing a core priority, Netflix executive rhetoric on this subject has started to shift, with Co-Founder and former CEO Marc Randolph dropping some strong hints to Yahoo that a password sharing crackdown may be coming:

"Streaming giants and cable companies, led by Netflix (NFLX) and HBO (T), are reportedly considering ways to crack down on password sharing among streaming users. “You’re not scared, are you?” Netflix Co-Founder & First Netflix CEO Marc Randolph told Yahoo Finance’s YFi PM, later adding: “You know there’s abuse and that’s not fair.”

While a lot has been made of said "abuse," it's important to remember that streaming providers already impose limits as to how many hardware devices can stream from one account at any one time. And while folks like Rutledge like to proclaim that password sharing constitutes the loss of millions in revenue, like in piracy debates there's no guarantee that users will automatically sign up for subscriptions should companies start being hard asses on the subject. Not being hard asses like this is the exact reason people, for now, like streaming providers so much more than their counterparts in the traditional TV sector.

That said, Randolph makes it clear he understands the name of the streaming game right now is getting customers to sign up, and any hard-nosed crackdowns--especially if they impose new barriers to access--only annoy users and make that more difficult. As a result, we're apparently only at the "whine more about it to the media" part of the program:

“I don’t think we’re talking about people coming into your apartment and putting you up against the wall and saying: ‘Show us your credentials,’” Randolph said. Randolph explained that from Netflix’s inception, it was meant to be flexible and easily accessible. "There’s abuse and that’s not fair,” he said. “But the whole time you want to make it easy for people to be flexible."

Right now, competition ensures that companies will likely remain flexible on this subject. The name of the game is gobbling up as many new subscribers as possible. But as the also-ran services are shaken off and a few companies come to dominate the space, you can be sure that a tougher crackdown on password sharing is waiting in the wings. Even if it's nowhere near the terrifying menace companies are portraying it to be.

Filed Under: marc randolph, password sharing, streaming
Companies: netflix