Raise your hand if you have given your Netflix password to someone else to use, or watch a service like Netflix by using someone else's password? It's not an uncommon occurrence, and it's costing payTV and over-the-top (OTT) operators billions.
According to a new report from Parks Associates, piracy and account sharing costs payTV and OTT operators in the U.S. more than US$9 billion in 2019, and it's forecasted to reach US$66 billion worldwide by 2022.
The report, entitled Video Piracy: Ecosystems, Risks, and Impacts, estimates that if just 10% of payTV subscribers discontinued their services in favour of accessing videos delivered by pirates, losses to those operators would reach US$6 billion by 2023.
A related report by Parks Associates found that of the US$9.1 billion lost in 2019 to credential sharing by U.S. video providers, 28%, or about US$2.5 billion, was lost due to piracy. The US$2.5 billion loss is part of an US$8.4 billion overall loss to piracy in North America.
"The rest of the $8.4 billion can be attributed to piracy by other means, such as theft of video content from production, from distribution, from jail-broken consumer devices, and from hosting by other pirates," says Steven Hawley, Contributing Analyst, Parks Associates, and Managing Director of Piracy Monitor.
The report finds most of the publicly acknowledged antipiracy efforts by U.S. payTV operators currently focuses on detecting and reducing credential sharing and account abuse. A Parks Associates survey of U.S. broadband households determined that 5% used someone else's credentials to access a payTV service and 6% did so to access an online video service. With many streaming services, accounts include the ability to access the service from multiple locations, often even at once, making credential sharing easy.
According to Hawley, credential sharing falls into two categories: most people share in a casual manner with no intent to profit from the sharing. But a bigger risk is with pirates that purchase large stolen consumer databases via the Dark Web and use automation to discover penetrable end user accounts.
"More than 12.5 million payTV households accessed pirate video in the U.S. in 2019, a low number compared to the Asia and Pacific region, where there are many more users but lower ARPU," says Elizabeth Parks, President, Parks Associates. "Video providers are carefully monitoring this threat and establishing dedicated teams and solutions to respond to piracy."