Big streaming companies like Netflix are looking to crack down on freeloaders who use other people's passwords and accounts
- The media industry loses billions of dollars to illegitimate password sharing, and it's now looking to crack down on the practice.
- Some suggested tactics include frequent password resets, two-factor authentication, geographically fencing where an account can be used, and even fingerprint recognition.
- While the companies report losses to password sharing, there's no guarantee that they'd make up those losses if features aimed at preventing password sharing are implemented. One analyst suggested that illegitimate users wouldn't pay for the services if they lost access to a shared account.
- Companies are struggling to find the right balance of restricting access from illegitimate users while keeping a positive experience for legitimate users.
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The media industry loses billions of dollars every year from people sharing video streaming accounts and passwords when they're not supposed to, and companies like Netflix and HBO are looking at ways to crack down on the practise, according to a recent report from Bloomberg's Gerry Smith.
The issue of password sharing and potential features that could help prevent it are now being discussed by an industry alliance dedicated to battling online piracy called Alliance for Creativity and Entertainment (ACE), which counts Amazon, Netflix, HBO, and Disney as members.
Some discussed tactics to prevent illegitimate password sharing include periodic account password resets and texting codes to account holders to let them keep watching movies and TV shows, according to the report.
Other suggested tactics reportedly include restricting access based on a user's geographical location. If someone is using an account on a media streaming device like a Roku in a different address than the address listed in the account, it could be deemed illegitimate. But mobile devices like smartphones and tablets, on account of being mobile, would not be restricted to geographical location.
Even fingerprint recognition as an authentication feature has been discussed, according to the report.
Media giants are approaching the issue cautiously, Bloomberg reports, amid concerns they could ruin the viewing experience for legitimate account users. If it becomes a chore to log in and use the service, legitimate users may give up on the service.
And even if companies do successfully reduce password sharing, there's no guarantee that illegitimate users would sign up and pay for the services, according to Guggenheim Securities Mike McCormack, who spoke with Bloomberg.
The industry recognises that legitimate password sharing among accounts does exist, and it's struggling to find the right balance. There's no set standard on password sharing, and different services offer differing numbers of users who can use an account simultaneously.
Business Insider asked for comment and clarification from Netflix, HBO, and ACE, but has not yet heard back.
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