Password sharing erodes revenues of streaming services
PremiumThe recent central bank mandate on digital payments requiring prior approvals has also turned away many subscribers
NEW DELHI : With US streaming service Netflix admitting its struggle with password sharing by consumers in its earnings call, several on-demand services in India said they’re losing up to 50% of their revenue as users share account details with friends and relatives. The companies are now looking at methods to prevent revenue leakage.
Many consumers avoid paying for multiple services and choose to borrow passwords. The recent central bank mandate on digital payments requiring prior approvals has also turned away many subscribers.
“Account sharing impacts the earnings of an OTT platform as it translates into loss of opportunity for subscription sales. Moreover, it is not limited to India but prevalent globally, and equivalent to piracy as password sharing means watching content for free," said Divya Dixit, senior vice-president, marketing and revenue, ALTBalaji. However, she said it was also an opportunity for a platform as it increases sampling and adds to monthly active users (MAUs). “There needs to be an upper limit to the number of viewers logging in to one account through password sharing or different devices, and most platforms practise the same. However, it is still misused. Platforms now need to take a hard look at pack pricing, strategy and access to streamline and address this concern," Dixit said.
OTT platforms allowed account sharing in India to attract subscriptions in their early days, said Ashish Karnad, executive vice-president and head, media and digital business at Hansa Research, a market research agency. “It was done because OTT usage then was largely a single device (mobile) viewership, and hence, it made sense to give a bundled offer as a family pack. However, consumers started using this facility beyond just immediate family, sharing it as a group subscription plan with friends and acquaintances," Karnad said.
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Users sharing passwords could access premium content at lower cost, while service providers could attract potential customers who might eventually migrate to their own subscriptions, Baskar Subramanian, co-founder and CEO at media tech firm Amagi, said. “While the concept had a promising start, it seems to have outlived its purpose. The OTT momentum has become a revolution with more TV consumers moving to streaming," he said.