What was already supposed to be a big year for streaming has only grown bigger. Streaming services began the year with a fight on their hands: New arrivals like Disney+ and Apple TV+ set out to fracture the streaming market that Netflix had long dominated, and services were arming themselves with billions of dollars’ worth of original content spending in a bid to win over viewers.
Then came the COVID-19 pandemic. As people in the United States and around the world were forced to stay home, streaming surged. In March of this year, Nielsen found that time spent streaming had jumped up 36% from February figures. Among Americans ages 25 to 54, streaming time in March 2020 was nearly double what it had been a year prior.
This streaming surge seems virtually certain to help streaming companies, but the impact is unlikely to be proportional. Subscription video on demand (SVOD) services allow unlimited viewing to subscribers, and those without ads won’t see much direct benefit from increasing streaming time among existing subscribers. Still, streaming’s more prominent role in everyday life during the pandemic could lead new subscribers to services like Netflix.
The trick is, though, that not every Netflix viewer pays for Netflix. Friend groups and families share accounts within households and — in violation of Netflix’s terms of service — across households. How common is password sharing, account “borrowing,” and mooching? To find out, CordCutting.com surveyed 1,000 U.S. adults. We asked about the streaming platforms they use and who pays for their subscriptions. Using the most recent data published by the Pew Research Center, we extrapolated our results to get a sense of the scale of streaming’s account-sharing dilemma.
In our analysis, there are about 142.5 million American adults using streaming services. That figure includes 63.4 million adults (about 34 percent of American adults) who use streaming services exclusively.
Age is more than just a number in streaming. Our study found that younger age groups were more likely than older ones to rely on streaming services exclusively.
The streaming market is growing more competitive, but Netflix is still dominant — something that is mirrored in our data. Across the board, our poll found viewership numbers that suggest a higher number of viewers than paying subscribers alone would account for. Disney’s platforms (Hulu and Disney+) were more popular with Gen Z and Millennial viewers — though that may be a mixed blessing, as we’ll examine in our section on subscription mooching.
Among our respondents, Amazon Prime Video and Hulu have done very well. They’ve both posted double digit gains since last year’s study, a surge fueled primarily by Millennial adoption. Netflix use rose only slightly, improving only with Baby Boomers.
Viewership is one thing. Subscribership is another. Much of what we see in viewership trends should be good news for streaming services, but the effects may be dampened by non-paying customers. Whether you want to call them “moochers,” “password sharers,” or “account borrowers,” free-riding users from outside of a paying customer’s household represent a challenge for streaming services.
How many of these viewers are paying for these services themselves? That depends on which service we’re talking about. Amazon fared best in our survey, with 69.1 percent of Amazon-watching respondents saying they pay for the service themselves. That may be related to Amazon Prime’s broader assortment of perks, which go beyond Amazon Prime Video to include things like free two-day shipping on some Amazon retail purchases.
Hulu viewers were more likely than not to be paying for the service themselves; 62.6 percent said they footed the bill. But the proportion dips to about half for Netflix users and Disney+ users.
Some of these people are sharing accounts within a household, which is permitted by streaming services. But not everyone is keeping things in the family. In 2019, we found that about 17 percent of respondents admitted to “borrowing” their streaming logins from people outside of their household. The number is down to just 11.6 percent today. Our data show that younger viewers are more likely to do this sort of out-of-household “mooching” than older ones.
If viewers aren’t paying, then who is? The answers vary: Our respondents were streaming thanks to the generosity (or the ignorance) of parents, siblings, friends, partners, and even exes. Mom and Dad were the most likely benefactors of the streaming masses: about 35 percent of streamers are using their parents’ accounts (that includes both in- and out-of-household password sharing).
Revenue Impact of Mooching
Clearly, streaming services are serving a lot of viewers who aren’t actually paying. How much does this cost them?
For a few reasons, that’s a tricky question. Extrapolating from our findings, we can determine that somewhere in the neighborhood of 44 million Americans are streaming without paying. That’s a high number, and it’s rising for most streaming services. If each of these viewers were to pay, it would mean big bucks for streaming companies: Netflix, for instance, would net $356 million a month in this hypothetical. In the real world, though, there are complications.
For starters, steaming service terms permit customers to share their account within their household. Those who password-share with the people they live with aren’t actually breaking any rules, and there’s no reason to count them as “non-paying” customers. Our true “moochers” only number about 16.5 million.
Even if we look solely at those breaking streaming service user agreements, we can’t conclude that all moochers are lost paying customers. As is always the case with piracy, we have to assume that only some of these moochers would actually become customers if they couldn’t steal. Others are interested in viewing these services only if they can find a way to get them for free.
That’s why we also asked respondents if they would purchase their own account in the event that they lost their borrowed access. Less than half of respondents were willing to do so. Netflix (47 percent) fared the best, followed by Disney (41 percent), Amazon Prime Video (38 percent), and Hulu (36 percent).
Should their access be revoked, more men than women said they’d pay up for Hulu and Disney+. The reverse was true for Netflix and Prime Video.
Even after winnowing down our numbers, the data suggest that streaming services could have billions to gain by cracking down on subscription sharing. Of course, the real world might intrude with other factors, like a public relations backlash to a password-sharing crackdown. For now, streaming services remain relatively passive on the password-sharing issue — that potential $2.71 billion notwithstanding.