Active Stocks
Thu Dec 07 2023 09:07:14
  1. Reliance Industries share price
  2. 2,460.7 0%
  1. Tata Steel share price
  2. 131.95 0.11%
  1. Wipro share price
  2. 419.55 0.17%
  1. State Bank Of India share price
  2. 608.15 0.01%
  1. Power Grid Corporation Of India share price
  2. 225.25 0.38%
Business News/ Industry / Media/  Password sharing erodes revenues of streaming services
Back Back

Password sharing erodes revenues of streaming services

The recent central bank mandate on digital payments requiring prior approvals has also turned away many subscribers

Many consumers avoid paying for multiple services and choose to borrow passwords, said some analysts. (Photo: iStock)Premium
Many consumers avoid paying for multiple services and choose to borrow passwords, said some analysts. (Photo: iStock)

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.

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.

The demand for quality content and superior user experiences have led to heavy investments by OTT providers in content libraries and technology. High-cost structures have made password-sharing an unviable business model for streamers, Subramanian added.

Neeraj Sharma, managing director, communications, media and technology, Accenture India, feels that the core issue is not account sharing but subscription fatigue. “How many subscriptions can one afford? And even if one can, how many individual passwords and expiry dates can one track? Cracking down on account sharing might give 30-50% uplift in revenue, however, given the under-penetration of the platforms, compared to social media platforms, this upside could be insignificant," Sharma said.

Akshay Bardapurkar, founder of OTT platform Planet Marathi said RBI’s mandate requiring additional approvals for digital payments to go through is making things worse. “This comes at a time when people now have several entertainment options opening up, they can go out and visit cinemas, for instance," he added.

To stem the revenue leaks, companies are trying out different things. While Bardapurkar’s platform is now offering only annual plans, Sanjiv Jaiswal, founder of Baba Play, centred on Ambedkar’s Dalit ideology, said his service only allows customers to access one title at a time, which must be completed within a window of 72 hours. Vibhu Agarwal, chief executive officer and founder of Ullu streaming app said the platform already logs one user out, if another tries to log in from the same account, on another device.

Some OTT platforms have tried to monetize password sharing by charging a fee for each additional user, which has faced flak, said Dean Houari, director of security, technology and strategy - APJ at Akamai Technologies, a provider of tech services to streaming and other digital platforms. “Enforcing a ceiling on the number of family members can be negatively viewed by loyal and potential customers so it is important for OTT platforms to adopt a solution that adds as little friction as possible," Hourari added.

Several OTT platforms are already implementing smart controls and options to curb account sharing, said Anand Gopal, co-founder and chief operating officer, Voiro, an ad-tech start-up that provides solutions to media companies. “The first of these is platforms offering family plans, secondary accounts and, in some sense, legitimising sharing up to a limit. Offering individual and family plans could create models that can find incremental revenue from secondary accounts. Then there are subscription services that have created interesting mechanisms to allow bite-sized purchases - allowing users to buy tokens or only purchase individual articles or movies as a one-time buy," Gopal said.

Milestone Alert!
Livemint tops charts as the fastest growing news website in the world 🌏 Click here to know more.

Catch all the Industry News, Banking News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 12 May 2022, 12:48 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App