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Password sharing is media companies' biggest problem

Cord cutting is a big problem for media companies, but it is not the biggest issue, analysts agree. The biggest issue, according to some of them, is the fact that millenials are “sharing“ passwords for access to content. To some analysts, this is not “sharing”, but outright theft, and if password sharing was addressed, the number of subscribers would increase and everyone would be happy again.

By “everyone” it’s obviously meant media companies.

"The millennials are a generation that grew up (and will likely grow old) 'sharing' (read stealing) passwords for access to content if it continues to be ignored," wrote Jefferies analysts Mike McCormack (opens in new tab), Scott Goldman, and Tudor Mustata in a note to clients Tuesday. "We believe it is the most significant cause of the declining pay TV subscriber base."

"Once upon a time, the pay TV industry faced a very serious problem and subscriber numbers suffered accordingly. The problem at that time was called 'theft of service'," said the analysts. "It took the form of illegal cable drops, third party set-tops, and reprogrammed satellite cards, and it took a significant effort to combat. Magically subscriber metrics recovered when the industry addressed the problem."

Password sharing should be approached in a similar fashion, with analysts offering two solutions: either limit the number of devices an account can be logged onto, or go for a la carte programming.

HBO executives have repeatedly said they aren't concerned about the password sharing issue, and the analysts say other cable providers are fine with it as long as they are using broadband.

A la carte programming allows people to choose exactly which channels they want to receive.

Sead Fadilpašić
Sead Fadilpašić

Sead Fadilpašić is a freelance tech writer and journalist with more than 17 years experience writing technology-focussed news, blogs, whitepapers, reviews, and ebooks. And his work has featured in online media outlets from all over the world, including Al Jazeera Balkans (where he was a Multimedia Journalist), Crypto News, TechRadar Pro, and IT Pro Portal, where he has written news and features for over five years. Sead's experience also includes writing for inbound marketing, where he creates technology-based content for clients from London to Singapore. Sead is a HubSpot-certified content creator.