'Cord Cheating' Common among US Subscription Streamers

[Flint]

This new form of stealing content is destined to make life harder for the honest folk like us who are more than willing to pay the small $10 or $12 fee every month to discontinue cable or satellite. Soon we will both be paying more to cover the lost revenue from these folk not paying and we'll have much more draconian measures put on our ability to access content. Why do people feel they have to get stuff for free?





TDG: 'Cord Cheating' Common among US Subscription Streamers

Almost One-Fifth of Subscription Streamers Use
Credentials of Someone Living Outside Their Household

March 11, 2015 (Plano, TX)

According to new research from The Diffusion Group (TDG), more than 20% of adult broadband users that stream video from an online subscription service are 'cord cheaters,' consumers who access these services using the account name and password of someone that does not reside in the same household.




"While it is widely acknowledged that 'cord cheating' is occurring, few comprehend how widespread the behavior has become," noted Michael Greeson, TDG Founder and Director of Research.

According to a TDG's latest research, a sizable segment of online subscription video viewers live in households that are not paying to enjoy on-demand access to movies, TV programs, and a host of other high-value video content. Content providers are losing substantial revenue by not enforcing more restrictive authentication procedures.

Importantly, the rate of 'cord cheating' varies dramatically among OTT SVOD services. For example, 20% of Netflix streamers are guilty of using non-resident credentials, compared with only 10% of Amazon Prime streamers. Even DISH's new Sling TV service is not immune to this behavior, with an astounding 26% of viewers reporting that they use the credentials of someone living outside their primary residence.

"This behavior reflects the unfortunate mindset among many of today's media users that it's perfectly acceptable to 'share' digital media -- whether files or service access -- among friends and family," notes Greeson. "Why should my daughter pay to stream Netflix when she can simply use my credentials to access the service with little fear of reprisal?"

'Cord cheating' is but one of the important consumer behaviors profiled in TDG's new primary research project, Benchmarking the Connected Consumer.

 

[Towen7]

Wait for it....

 

[mcad64]

I have two neighbours that readily admit to doing this. They see nothing wrong with it. Sometimes I worry about the younger generation.

 

[Haywood]

What is a household? I pay for a certain number of concurrent streams when I pay for my Netflix subscription. If my daughter uses one of those streams from her tablet while at her grandparent's house, that is not stealing. If she is still my dependent and streams from her dorm room at college, that is not stealing either. She is using a stream that I am paying for. An independent adult living on their own is a different story. I am talking about dependents. I guess my point is that you cannot assume something is nefarious just because the streaming occurred outside of the primary residence.

You also have to factor in HBO's interesting move when they actively encouraged people to share HBO Go logins. They were obviously trying to assess the size of the potential streaming only audience and to hopefully attract customers for their upcoming HBO Now service. In this particular case, it is hard to claim theft when the provider actively encouraged and allowed it. I do realize this is an exception.

My only point here is that this is more complex than implied by the original post.

 

[Haywood]

Sling TV only allows for a single stream. That means no concurrency. I therefore call bullshit on the claim of widespread theft. Non-residential credentials is just a shit measure.

 

[Huey]

I say this somewhat tongue in cheek, but isn't posting the article from another website, along the same lines? If you had linked to the article, might the website see increased revenue due to increased traffic? I know I've seen websites asked people to take the articles down and only provide links, so I don't think I'm too far off base here.

 

[Flint]

What is a household? I pay for a certain number of concurrent streams when I pay for my Netflix subscription. If my daughter uses one of those streams from her tablet while at her grandparent's house, that is not stealing. If she is still my dependent and streams from her dorm room at college, that is not stealing either. She is using a stream that I am paying for. An independent adult living on their own is a different story. I am talking about dependents. I guess my point is that you cannot assume something is nefarious just because the streaming occurred outside of the primary residence.

You also have to factor in HBO's interesting move when they actively encouraged people to share HBO Go logins. They were obviously trying to assess the size of the potential streaming only audience and to hopefully attract customers for their upcoming HBO Now service. In this particular case, it is hard to claim theft when the provider actively encouraged and allowed it. I do realize this is an exception.

My only point here is that this is more complex than implied by the original post.

In this case, "Household" refers to the people residing in a household. A student at college is considered a member of the parent's household. However, once that child gets their own place and is gainfully employed and paying taxes, they are no longer a member of their parent's household.

So, for the case of this study, they are not referring to the exception you bring up.

 

[Flint]

I say this somewhat tongue in cheek, but isn't posting the article from another website, along the same lines? If you had linked to the article, might the website see increased revenue due to increased traffic? I know I've seen websites asked people to take the articles down and only provide links, so I don't think I'm too far off base here.

That's a good point, and I usually post links to articles. In this specific case (and I didn't originally mention this fact) the article I posted is the summary of a much larger study used to entice people to purchase the study. I assumed no one here would buy the study, so I did not include that additional information.

 

[Haywood]

The entire way they are measuring this is deeply flawed, since a lot of people stream to mobile devices when outside the home. People also stream to hotel rooms, vacation homes, the aforementioned college dorm situation and a variety of other places and scenarios that are away from the main residence.

 

[Flint]

The entire way they are measuring this is deeply flawed, since a lot of people stream to mobile devices when outside the home. People also stream to hotel rooms, vacation homes, the aforementioned college dorm situation and a variety of other places and scenarios that are away from the main residence.

I believe you misunderstand what they are measuring. They are not saying people who have an account who are using that account outside of the homes are cheaters, as I think you are interpreting it.

What the research is saying is that there is a 20% chance that a user is using an account from someone who is not living with them and that is cheating.

For example, if I use my mom's credentials to watch Hulu+ I am cheating because she lives completely separate from me and earns her own money and pays her own taxes. She and I do not reside in the same household.

 

[Haywood]

I wonder how they know. I assumed they were making assumptions based on IP address, which would be dicey.

 

[Towen7]

They may just have asked. I know lots of people that use other people's credentials for streaming and they don't hide it. We have a couple of members here that talk about sharing their passwords with family to spread the cost of multiple services.

 

[Flint]

It wasn't a study of IP addresses. It was an extensive study of specific users.

 

[Haywood]

I used my parents account to get HBO GO, but only because HBO said it was fine and they did not have a service I could directly subscribe to. That was a smart move for them, because I and many others like me are going to jump on HBO Now as soon as we can get it. I always understood that their sanctioned borrowing was essentially a limited duration marketing scheme and have no qualms about paying for the service once it is available on non Apple devices.

 

[Haywood]

I read today that only 40% of households pay for a streaming service and most that do only have one. I must be a serious outlier, because I pay for six (Netflix, Hulu Plus, Amazon Prime, Funimation, Drama Fever and Viki).

 

[Deacon]

I think this will be less of a problem with the overall advent of smart tvs. Soon the only TV you will be able to purchase will have to be a smart tv so that should create a more defined 'home base' for which subscribers can be monitored.

That shouldn't be hard to do as many already monitor access like Yahoo. When I tried to access Yahoo here in Liberia I had to verify that it was me cause they didn't recognize the IP address I was using. I don't see why streaming services can't do the same thing if they are truly worried about this so called cord cheating.

 

[Haywood]

I think this will be less of a problem with the overall advent of smart tvs. Soon the only TV you will be able to purchase will have to be a smart tv so that should create a more defined 'home base' for which subscribers can be monitored.

That shouldn't be hard to do as many already monitor access like Yahoo. When I tried to access Yahoo here in Liberia I had to verify that it was me cause they didn't recognize the IP address I was using. I don't see why streaming services can't do the same thing if they are truly worried about this so called cord cheating.

That will not work, because it would break mobile access. Mobile access is extremely important in certain demographics, such as Millenials. Tell them that they can only watch on a TV set in their house and they will tell you they are not interested. The future is being able to watch what you want, where you want, when you want. Anything else is going to fail.

 

[Deacon]

I think this will be less of a problem with the overall advent of smart tvs. Soon the only TV you will be able to purchase will have to be a smart tv so that should create a more defined 'home base' for which subscribers can be monitored.

That shouldn't be hard to do as many already monitor access like Yahoo. When I tried to access Yahoo here in Liberia I had to verify that it was me cause they didn't recognize the IP address I was using. I don't see why streaming services can't do the same thing if they are truly worried about this so called cord cheating.

That will not work, because it would break mobile access. Mobile access is extremely important in certain demographics, such as Millenials. Tell them that they can only watch on a TV set in their house and they will tell you they are not interested. The future is being able to watch what you want, where you want, when you want. Anything else is going to fail.

Yeah but my point was there is already IP address tracking so it should not be too hard to implement some type of validation system for streaming services.

 

[Haywood]

Honestly, a lot of this hand-wringing is over-wrought. Most of these services only support a limited number of concurrent streams and some only allow a certain number of client devices, which need to be registered. If I am paying for a service that allows three streams across 12 devices, what I do with those streams is somewhat beside the point. I cannot exceed that number of streams or scale across more than a certain number of devices. That is what I am paying for. The more I think about it, the less I am sure the concept of a household is even relevant when services are sold based on the number of concurrent connections rather than the number of users.

 

[Akula]

Honestly, a lot of this hand-wringing is over-wrought. Most of these services only support a limited number of concurrent streams and some only allow a certain number of client devices, which need to be registered. If I am paying for a service that allows three streams across 12 devices, what I do with those streams is somewhat beside the point. I cannot exceed that number of streams or scale across more than a certain number of devices. That is what I am paying for. The more I think about it, the less I am sure the concept of a household is even relevant when services are sold based on the number of concurrent connections rather than the number of users.

I think Haywood is onto it here.

If you're essentially paying for a number of streams, then to the service it doesn't really matter who is using them.

The only amount "lost" would be any amount paid by the other person who might have otherwise had their own subscription... assuming they would have had one. If I pay for, say, the 4 screen Netflix plan over the one or two screen plans and let a relative stream, then Netflix is getting a little more out of me to cover the extra streams, even if that might not be as much as a separate account entirely.

Now here's the thing... Netflix, for example, has nothing in their terms of use limiting the use of one's account to those in the same household. I just looked over their terms of use... it isn't in there. As far as they're concerned, you're paying for a number of streams. You can't use it for public performances, but nothing in there says you can't let a friend or relative use your account. In fact, their user system is really designed to facilitate that- you can have different watchlists for different users.

So, IMO, check the terms of the services you use. They'll tell you what isn't allowed.