clock menu more-arrow no yes mobile

Filed under:

Password sharing could be a good thing for Netflix and Hulu

People only steal content if they think it’s good. That’s bad news for Amazon Prime Video.

A person uses a remote with a Netflix button.
Netflix and Hulu should view password sharing as a form of flattery.
Jaap Arriens/NurPhoto via Getty Images
Rani Molla is a senior correspondent at Vox and has been focusing her reporting on the future of work. She has covered business and technology for more than a decade — often in charts — including at Bloomberg and the Wall Street Journal.

Perhaps Netflix and Hulu should view password sharing as a form of flattery rather than seeing it as a bad thing. That’s because people are only making the effort to borrow a video streaming password when it’s for something they actually want to watch.

Some 14 percent of Netflix users are using a password from someone outside their household, while 11 percent of Hulu users are doing so, according to a new report by analysts at MoffettNathanson. Meanwhile, just 6 percent of Amazon Prime video customers steal passwords.

And yet people stream Netflix and Hulu shows and movies much more often than they do on Amazon. Nearly 40 percent of Netflix and Hulu users watch those services daily, compared with just 22 percent of Amazon Prime Video users. The new data is in line with an April survey by the research firm.

“[P]assword sharing with non-family members remains an issue ... or an opportunity,” the report’s author, Michael Nathanson, wrote. “[T]he lack of password sharing at Amazon may speak to the relative consumer disinterest in that service.”

However, Amazon Video users’ minimal password sharing could also have to do with the service being a part of Prime, where password sharing would allow someone to snoop on what you buy, or even make their own purchases using your account. Still, Amazon is much less popular than its rivals.

Netflix has already gotten lots of sincere flattery in the form of new streaming competitors copying its business model and threatening to pull their old content — like Friends and The Office — from Netflix.

In order to lure more users, Netflix and its competitors have been spending heavily on their own original content — i.e., TV and movies that they own and that competitors won’t ever be able to pull from their streaming catalogues.

Whether these new contenders can be as successful as Netflix, which has 149 million paying subscribers worldwide — in addition to millions of unpaid users who rely on password sharing — remains to be seen. But so far, borrowed logins are a good indication of what people are actually watching.

Recode and Vox have joined forces to uncover and explain how our digital world is changing — and changing us. Subscribe to Recode podcasts to hear Kara Swisher and Peter Kafka lead the tough conversations the technology industry needs today.

Sign up for the newsletter Today, Explained

Understand the world with a daily explainer plus the most compelling stories of the day.