Rampant password sharing hampers OTT players' user growth in India

New Delhi, April 2 (IANS) If you are someone who relies on passwords from friends to binge-watch Netflix or Amazon Prime Video, you are contributing to OTT players losing millions of dollars every year owing to password sharing among friends or family members.

As the OTT platforms witness a surge in subscriptions amid the pandemic, the problem of password sharing has also grown and resulted in stalled user growth for several players.

The major OTT giants, including Netflix, are working relentlessly to fix the problem of password sharing.

The streaming giant recently said that it is planning to pause password sharing outside a single household by charging users extra for doing so.

Netflix said it will launch and test two new features in select markets, where members will have to pay an additional $2 to $3 for sharing their passwords with people outside their homes.

Faisal Kawoosa, founder and chief analyst of market research firm Techarc, said that stopping password sharing can only be done in case of "hard binding" the account with the device.

"There are many techniques like 'MAC binding'... But even this can be flouted as generally, they would allow on two devices -- a smartphone and a smart TV. So even if I want to share account credentials with someone, one would watch on a smartphone and another one on Smart TV," Kawoosa told IANS.

"The OTT platforms need more security, for example, using location-based methods where it is possible to run the account in a geo-fenced area," he added.

'Mac binding' means binding together the MAC and IP addresses, so that all requests from that IP address are served only by the computer having that particular MAC address.

In March 2021, a Citi analyst, Jason Bazinet, had estimated that sharing online passwords to subscription video-on-demand (SVOD) services means a massive $25 billion yearly loss for the US companies, estimating that one company alone accounts for around 25 per cent (i.e., around $6 billion) of that lost revenue.

According to a recent report in Variety, the problem of password sharing has become much worse.

The report cited a survey of 1,500 US consumers that said 40 per cent use a streaming login and password that does not belong to them, with roughly a third doing so without permission from the account holder.

The experts mentioned that there are a variety of methods for detecting password sharing, but most now use artificial intelligence (AI) to identify password sharing by tracking location, usage patterns, and other factors across several devices.

A detection service looks for patterns that imply a shared password by analysing the content that is watched, analysing on which device it is watched, and from where it is watched. The AI then provides the service provider with a probability score indicating how likely the account holder is to be 'oversharing'.

As OTT platforms continue to suffer losses as a result of password-sharing threats, it won't be long before paid users in India will be forced to pay for exchanging passwords with distant relatives and friends.