OUR Netflix will lose about $6.25 billion a year due to password sharing. According to experts, streaming services are losing astronomical values ​​because of this, including resale at a cost much lower than officially practiced.

In an article in The Sacramento Bee, websites are selling a 4K Netflix subscription for as little as $1, with the regular US price being $19.99. In Brazil, the cost is 55.90 reais. The company is not the only one suffering from this type of illegal trade. HBO Max and Disney+ are also stolen by so-called fraudulent markets. On the parallel market, HBO Max is $1.09 and Disney+ is $0.90.

As competition for customers among streaming services intensifies, online marketplaces are proliferating, where passwords are sold illegally at prices far below market rates. These illicit markets have emerged in response to the popularity of password sharing, which has become a growing headache for streamers who rely on subscription revenue to fund the rising cost of content production.

Account sharing and piracy cost streaming services and pay TV providers $9.1 billion in lost revenue in 2019. That amount is expected to rise to $12.5 billion in lost profits by 2024, according to Parks Associates, a research and consulting firm. Other experts note that these estimates are conservative. A Citi analyst said that streaming services are losing about $25 billion a year due to password sharing, with Netflix accounting for 25% of that amount (which is $6.25 billion).

“In the past, password sharing was allowed because it’s a way to increase your audience, your brand and your service.“said Ken Gerstein, vice president of sales for NAGRA, a Swiss company that advises streamers and others on anti-piracy issues.”But there is a point where competition starts to limit growth. So you can see the tipping point that is starting to have such a huge impact on subscriber growth that it forces streaming to take action.“, he decided.

restrictive measures

The streaming platform this Wednesday (16) banned account sharing in Costa Rica, Chile, and Peru. Because three countries are part of Latin America. Subscribers will need to access Netflix through the same IP address. If the IP address is different, the consumer will need to provide a verification code sent by email. Each time a user registers a code, Netflix will record the IP address and the same process will need to be repeated each time the IP changes. This strategy makes it difficult to access the platform in different locations from the same account.

“As a result, accounts are shared between families, which affects our ability to invest in new series and movies for our members.“Chengy Long, director of product innovation at Netflix, wrote on his blog last month.

He added that the company will monitor the trials before rolling them out to other countries.

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Source: Sacramento Bee