Is Sharing Your Netflix Illegal?

Category: Television , Video

Lots of people share their password for Netflix, Hulu or Amazon Prime with family and friends. But is it a crime to share your video streaming account with non-paying others? Read on to find out...

Sharing Streaming Accounts: Piracy Lite

Have you ever seen a message like this? "Your Netflix account is in use on another device. Please stop playing on other devices to continue." That may happen if you're oversharing. But how much sharing is too much sharing? And when does it rise to the level of a crime?

Netflix recently announced a $1.00 increase in the monthly fee for its standard subscription, which allows simultaneous streaming to two devices. A Goldman Sachs analyst says, “We believe a targeted price change like this is designed to reduce excessive password sharing by incentivizing users to switch to the 1-screen plan,” which costs $1 less per month.

A Consumer Reports poll found that 46% of Americans have shared their streaming account passwords with someone outside of their home. About 11% of broadband-using households receive Netflix, Amazon Prime, Hulu Plus, or some other streaming services by sharing someone else’s password, according to a May 2015 study conducted by Parks Associates. That translates into a combined $500 million of lost revenue for all streaming service providers in 2015.
Is Netflix Sharing Illegal?

College students are the worst moochers, with 20% of 18-24 year-olds admitting they use someone else’s password to get Netflix or other video streaming services for free. Usually, it’s their parents’ account, but students have no problem with sharing passwords among themselves.

Officially, Netflix is unconcerned about this “piracy lite,” as Parks Associates calls it. The company says it doesn’t track revenues lost to password-sharing. None the less, Netflix’s terms of service warn subscribers, “The Account Owner should not reveal the password to anyone.”

How Much Sharing is Allowed?

Netflix customers have three options. There's the 1-screen account which allows no sharing. Two-screen and four-screen options cost a few dollars extra per month, and are supposed to be limited to sharing within a household. But it seems the company doesn't enforce that restriction, nor do they assess any penalties for violators. Amazon Prime limits customers to two devices for simultaneous viewing. HBO GO allows for three, but Hulu Plus has a limit of one viewing device at a time.

Of course, these restrictions only apply to simultaneous viewing. If you share your password with 10 people, and they're all watching at different times, you won't hit any multiple screen limits. And for the most part, the content providers don't seem to have a problem with that.

In Tennessee, however, sharing a streaming service password is a misdemeanor under a "theft-of-services" law that was updated in 2011 to explicitly include “web entertainment services.” Violators face up to a year in jail and up to a $2,500 fine. I can’t find any evidence of prosecutions under this law, and one wonders why the state would have it on the books when the streaming services seems quite capable of managing the situation themselves.

“Piracy lite” may be morally wrong and technically illegal in Tennessee, but it’s not very dangerous. Password-sharing is different from the theft and resale of passwords. There is little security risk in sharing a Netflix password with a college-bound child, a significant other, or someone else you know and trust. Streaming services don’t provide opportunities to plant malware on an account holder’s computer or compromise financial accounts.

On the other hand, couples who share streaming accounts while romantically involved often find it difficult to stop after they break up. A recent article on Slate.com asks, “Do couples need pre-nups for their shared streaming passwords?” http://goo.gl/h5AA9T It explores several relationships, some bittersweet and some horrifying, in which people continued to share streaming passwords after their relationships ended. Several examples left me shaking my head and mentally urging the account owners to “just change the darned password!”

Netflix, Hulu, and other streaming services are unlikely to crack down on password-sharing in the near future. Even half a billion dollars is a drop in the streaming industry’s bucket, and every freeloader who becomes addicted to streaming media is a potential paying customer when Mom and Dad (or an ex-girlfriend) cut the cord. But Netflix’s recent price change suggests that password-sharing needs to be reined in, or at least “disincentivized.”

Your thoughts on this topic are welcome. Post your comment or question below...

 
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Most recent comments on "Is Sharing Your Netflix Illegal?"

Posted by:

Doug
29 Oct 2015

If you have to ask, it is probably a bad idea.

Sharing accounts where there's a credit card on the account (Amazon Prime, for sure) seems to open up a hornet's nest of big/unexpected charges landing on the wrong credit card.

If Amazon wanted this sort of sharing, they'd make multiple cards and multiple addresses easy. The fact that it is not easy speaks for itself in terms of legitimacy.


Posted by:

RD
29 Oct 2015

We have had Netflix for years. Our subscription allows for streaming to three devices - located anywhere. This service was originally touted as ideal for families with college students: Mom and Dad could watch on one device at home, and the student(s) could watch at the dorm.

We have one device hooked up at the house, and another at a different location. We're happy, and Netflix is happy.

Hard to see why Netflix would invest people or hardware to enforce the rules if the distribution software does it for them. If our license allows three devices at a time, and they are sending out no more than three streams at a time, all the contract conditions are being met.


Posted by:

Kenduro
29 Oct 2015

If 46% of Americans share their passwords, how are college students are the worst offenders, at only 20%? Ignoring the discrepancy of the data, I would agree. Is there a typo here?

EDITOR'S NOTE: I think the difference is "have shared" versus "are sharing."


Posted by:

John
29 Oct 2015

The fine in Tennessee for sharing a streaming password with a family member should not be illegal since Netflix charges $11.99 to allow 4 screens instead of the normal charge of $7.99.

I suspect the non-sharing law was enacted by greedy Republicans who dominate Tennessee. Their interests are for the wealthy and they could care less about the working class and the poor.


Posted by:

Bruce
29 Oct 2015

I was brought up to believe that sharing was a good thing. Bizarre how big business likes to totally invert conventional morality.


Posted by:

Larry
29 Oct 2015

@John - Do you really need to bring politics into this? Do you think there are no greedy Democrats?


Posted by:

Mac 'n' Cheese
29 Oct 2015

I dunno. If I check out a library book (does anybody actually go to the library any more?), am I allowed to let you read it, assuming I'm able to return it to the library before it becomes overdue? Or is that too much sharing?

Kindle lets me share any book I've bought with someone else, but there are restrictions as to how long and how many times I can share it.

As to sharing Netflix passwords with your kids in college, it was hard enough to get my kid to study, and that was before Netflix, or even the Internet, for that matter. Why would I want to give Junior another reason to skip the books?

Yes, I know that has nothing to do with the issues at hand. I'm just sayin'. ...

Mac


Posted by:

Peter
30 Oct 2015

postpartum? (in "postpartum relationships") ... Bob, I do not think it means what you think it means.

EDITOR'S NOTE: Agreed, bad choice of words. I removed it and the sentence works better!


Posted by:

PMWill
30 Oct 2015

I thinks it's odd that a perfectly fine article can turn into political mud slinging.
I kind of was reluctant to get our first ROKU, but now we have three in the house and the price for NETFLIX even at a $1. increase isn't so bad. Other people with less responsible ideas will always negatively impact the rest. Like the poor they will be with us always.
Thanks for a good article of interest.


Posted by:

Al. S
30 Oct 2015

I don't and never have shared my Netflix, Hulu or Amazon Prime account. I am able to stream Netflix to my Cell Phone,(where I like to search for Shows) I can stream to my Tablet, My ROKU, Laptop at the same time. I pay the $7.99 monthly charge. Hulu 2 screens and I have never tried more than one screen on Amazon. All these devices are in t6he same room.


Posted by:

Annette
30 Oct 2015

Quite honestly nothing is wrong with sharing with another family member.


Posted by:

Rick
30 Oct 2015

I have both a Netflix and a Roku account. My wife takes her Roku with her when she travels. I know that we use the account at the same time but I have never had an issue. I don't believe that someone should be handing out their password to their friends. That is theft of services in my book.


Posted by:

HA
30 Oct 2015

Hey, this sounds like a great idea! Could somebody please post their password so I can share?


Posted by:

Kenduro
30 Oct 2015

If 46% of Americans share their passwords, how are college students are the worst offenders, at only 20%? Ignoring the discrepancy of the data, I would agree. Is there a typo here?


Posted by:

Another Bob
31 Oct 2015

Putting aside the ethical issue of sharing passwords... I think Netflix probably wants it both ways. They want to receive the monthly dues from as many people as possible, but they also want as many people as possible watching, to claim higher viewership and to make advertising easier to sell.


Posted by:

Byron M.
01 Nov 2015

I make it a habit of routinely changing my passwords for on-line accts. Same goes for my wireless Internet. As for sharing passwords for services like Netflix, NO. If someone wants to watch a movie on Netflix via my acct they can come visit me and we will watch it together. If someone can't afford a Netflix acct, eg. Poverty stricken students, the cost is not that much to pay for an individual acct for them to avoid any controversy with the company policy. I pay xtra to have more than one device access Netflix at the same time. My wife watches movies she likes, I watch my Sci Fi and Action movies :)


Posted by:

Kevin
02 Nov 2015

Tennessee wants the tax revenue. I pay sales tax which, if I share my account, they won't get from the other party. It's all about the dough.


Posted by:

MmeMoxie
06 Nov 2015

Paying a dollar more, for each TV in your household, doesn't sound to much for me. Do I share with friends - no! I did have a Spotify account and shared it with 2 of my daughters, who love musice, as much as I do.

Spotify was up front, should 2 members want to use Spotify, only one can. When the account was in use, no one else could get into the account. Occasionally, I would try to use Spotify and one of my girls was using it, so, I just waited until later.

Now, with Spotify, no credit card was used, because, I had a paid, one year Premium account. I don't think Spotify does this anymore. Everything is a monthly charge, which, I hate.


Posted by:

Jacklene Gill
28 Dec 2015

I have Hulu, Netflix, and Amazon Prime. I share Netflix with my son who lives in the same house with me because I have paid for two devices. Since I have paid for two devices I think it should be my choice as to who I share it with. Hulu and Amazon Prime only play on my computer since the blue ray my son uses will not support them.

I don't see why any of the companies should have a problem with limited sharing since Hulu also advertises during the shows and none of the three are putting anything very new online. It's a good thing I like the old shows, but even so I am running out of things to watch.


Posted by:

ussjimmycarter
04 Jun 2016

My cable company (Mediacomm) charges me for a channel that then advertises to me! Sundance! I'm so sick of all of these companies I wish I could develop the courage to throw out my TV! I'm getting closer! I feel no sense of loyalty or morality when it comes to cable and/or content providers. They certainly feel none for me!


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