Is it Legal to Share Your Netflix Password?

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, or using someone else's account. But how much sharing is too much sharing? And when does it rise to the level of a crime?

The point could soon be moot, according to Synamedia, a software company that recently announced new technology that uses artificial intelligence to help streaming companies like Netflix, Amazon Prime and Hulu put the kibosh on accounts that don’t belong to those using them. The software can determine if someone is logged in at home, at work, in a dorm, or a hotel. And presumably, it can figure out if that location is the account holder's home, or somewhere else.

Millennials are are the main moochers, with 26% 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. 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. I've not seen an update to that report, but one can only assume that the numbers are not going down.

Netflix, in its terms of service, says: "The Netflix service and any content viewed through the service are for your personal and non-commercial use only and may not be shared with individuals beyond your household." Netflix denied earlier this year that they are working with Synamedia. But Parks Associates, a firm that reports on the the online video industry, says that password sharing will cost providers about $550 million in 2019. With over half a billion dollars left on the table, one wonders if they'll be tempted to crack down on the practice.

How Much Sharing is Allowed?

For now, the streaming services don't seem overly concerned about password sharing, at least in their public statements. The current strategy seems to be to control that with their own technology, and with pricing tiers that permit different levels of account sharing.

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 strictly enforce those restriction, nor do they assess any penalties for violators. Amazon Prime limits customers to two devices for simultaneous viewing. Hulu has a limit of two viewing devices at a time, but offers an Unlimited Screens option for an extra $15/month.

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.

Couples who share streaming accounts may find it difficult to stop after they break up. An article on Slate asks, “Do couples need pre-nups for their shared streaming passwords?” 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 changes 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...