Anti-Piracy

Cartesian Report: 1 in 5 Americans Share Credentials

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A new report from Boston-based media consultancy firm Cartesian found that 22% of U.S. residents admit to credential sharing, and 42% of those aged 18-24 report the same, adding up to as many as 46 million streamers who aren’t paying for services they use.

The report — “The Threat of Credential Sharing and Theft” — found that ESPN+ was the service most-abused via shared credentials, with CBS All Access, Disney+ HBO Now and Netflix rounding out the top five.

“We found that 56% of people who use shared credentials would be willing to pay for them if they stopped working,” said Cartesian manager Rishi Modha. “This is a huge missed revenue opportunity for streaming video providers, even after accounting for the fact that some users may not follow through on their honest intentions.

“If you first experience a streaming service using a friend or relative’s credentials, there’s minimal barrier to continuing to use the service for free, even if you would otherwise be willing to pay. Finding the right approach to convert this segment into paid users is a huge opportunity for providers and could drive substantial subscriber growth for those who can execute successfully.”

The report found that people primarily share credentials because it’s easy. And because it’s so common, most people don’t consider it to be unethical. Twenty-seven percent of individuals surveyed reported sharing credentials with someone outside of their home and among individuals who reported using shared credentials, 58% said they received them from a friend or acquaintance, and 48% said they receive them from a family member outside of their household.

“There are clear differences by age – the younger you are the more likely you are to use shared credentials. For example, 42% of 18-24 year olds reported using shared credentials, while only 22% overall do,” said Samuel Kornstein, chief financial analyst and VP of strategy and analytics at Cartesian. “Younger generations have grown up with access to lots of free online content, and see this as normal. Providers need to find effective ways to turn them into paying customers, or monetise their viewing, otherwise they risk undermining their business model.”

But the report did offer hope to streaming providers, with two-thirds of those who use shared credentials also reporting they pay for at least one other service, and 56% saying they would pay for a service if the shared credentials they use stopped working.

“[Providers’] top priority should be to deliver a compelling service that meets the expectations of your typical multi-screen family household,” Modha said. “Since platform-wide restrictive policies can result in lower customer satisfaction and increase churn, we typically don’t recommend them to reduce or prevent credential sharing.

“Instead, we recommend using analytics and machine learning to identify the specific accounts that are abusing their credentials, and then to deploy highly targeted tactics.”

Modha added: “For example, providers can deliver personalised offers to upgrade high usage accounts into premium packages, or they can apply targeted restrictions to a small subset of accounts that are clearly engaged in widespread credential abuse. Testing and scaling these types of tactics can be an extremely effective way to find an appropriate balance that converts credential sharing behaviour into incremental revenue without jeopardising the customer experience.”

To access the report, click here.