- The media industry has lost billions of dollars in illegally password-sharing and is now seeking to break the practice.
- Some suggested tactics include frequent password resetting, two-factor authentication, geographical enclosures where the account can be used, and even fingerprint recognition.
- While companies report losses on password sharing, there is no guarantee that they will offset those losses if features aimed at preventing password sharing are applied. One analyst suggested that unauthorized users would not pay for the services if they lost access to a shared account.
- Companies are struggling to find the right balance to restrict access by illegitimate users while maintaining 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 shouldn't, and companies like Netflix and HBO are looking for ways to follow the practice, according to a recent report by Gary Smith on Bloomberg
The issue of password sharing and potential features that could help prevent it is now being discussed by an industry alliance on online piracy called Alliance for Creativity and Entertainment (ACE), which counts Amazon, Netflix, HBO and Disney as members.
Some tactics discussed to prevent the illegal sharing of passwords for friends and family accounts include periodic resetting of account passwords and text codes of account holders so that they can continue watching movies and television shows, according to the report.
Other suggested tactics have reportedly included restricting access based on a user's geographic affinity location. If someone uses an account on a streaming media device such as Roku at an address other than the address specified in the account, this may be considered illegitimate. However, mobile devices such as smartphones and tablets, due to their mobile services, will not be limited to geographical location.
According to the report, fingerprint recognition was even discussed as a function of authentication.
Media giants are approaching the issue carefully, Bloomberg reports, amid concerns they may ruin the viewing experience of legitimate users of the account. If you get bored of logging in and using the service, legitimate users may opt out of the service.
And even if companies successfully reduce password sharing, there is no guarantee that illegitimate users will sign up and pay for services, according to Mike McCormack of Guggenheim Securities, who spoke with Bloomberg.
The industry recognizes that there is legal password sharing between accounts and is struggling to find the right balance. There is no set standard for password sharing and different services offer different number of users who can use an account at the same time.
Business Insider requested comment and clarification from Netflix, HBO and ACE but has not yet heard. [1