OTT password-sharing to cost industry US$500 million

Glenn Hower

Password-sharing for over-the-top (OTT) video services like Netflix will cost the content industry US$500 million (€450 million) in 2015, according to Parks Associates.

The research firm’s ‘Cost of Piracy’ report claims that 6% of US broadband homes use an OTT video service that is paid for by a person living outside of the household.

Among people aged 18-24, 20% of OTT users were found to use an OTT video service paid by someone outside the home – the highest of any age group. The equivalent figure for OTT users aged 25-34 year-olds was 10%.

“Credential sharing has a measurable impact on video services, particularly in the OTT video service area, where young subscribers are active. The impact on OTT video revenues is especially troublesome as OTT providers are investing large sums of money to boost their original content offerings,” said Parks Associates research analyst, Glenn Hower.

“While credential sharing predominantly impacts OTT service revenues, the process will affect pay TV operators in a similar fashion as they develop and deploy their own OTT and TV Everywhere offerings. The motivation for credential sharing is primarily economic, and a move to consolidate video service subscriptions among family and friends stands to impact digital video services of all types in the near future.”