'Cord Cheating' Common Among SVOD Services

18 Mar, 2015 By: Erik Gruenwedel

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More than 20% of adult broadband users in the United States access subscription streaming services using the account name and password of someone that does not reside in the same household, according to new data from The Diffusion Group.

Dubbed “cord cheaters,” the demographic is a niche group of high-speed Internet users favoring over-the-top video without directly paying for it. As SVOD and direct-to-consumer video platforms flourish, ubiquitous access at any connected device can be easily manipulated with third-party authorization.

Though launched just last month, 25.5% of Dish Network’s Sling TV’s users are accessing the service with third-party authorization. More than 21% of Hulu Plus users aren’t paying for the service. Almost 20% of Netflix streamers are guilty of using non-resident credentials, compared with 18% of HBO Go and 10% of Amazon Prime Instant Video users.

“This behavior reflects the unfortunate mindset among many of today’s media users that it’s perfectly acceptable to ‘share’ digital media — whether files or service access — among friends and family,” Michael Greeson, director of research, said in a statement. “Why should my daughter pay to stream Netflix when she can simply use my credentials to access the service with little fear of reprisal?”

Netflix, which allows up to two people to use a single account, in 2013 bowed a $11.99-per-month plan enabling up to four people to use a single account. At the time it was suggested that 10 million people accessed Netflix without paying for it, according to Wedbush Securities analyst Michael Pachter.

Regardless, content providers are losing substantial revenue by not enforcing more restrictive authentication procedures.

“While it is widely acknowledged that ‘cord cheating’ is occurring, few comprehend how widespread the behavior has become,” Greeson said.

 

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