Internet streaming services like Netflix are turning a blind eye to password sharing even though the practice may be costing them millions of dollars. Increasing numbers of Canadians are subscribing to Netflix to be able to choose and watch programs and movies at will.
Canadians dropping traditional TV
At the same time, more Canadians have stopped paying for traditional TV service, according to a report prepared for the public broadcaster, CBC. In May of this year, sixteen per cent of people said they did not pay for traditional TV service. That was up from 12 per cent three years ago.
One survey found 39 per cent of English-speaking Canadians had subscribed to Netflix towards the end of 2014 compared to just 26 per cent in the same period the year before. And there are many more watching Netflix without subscribing and instead, using a password from a friend or family member.
Not legal, but arrest unlikely
“Technically it isn’t legal,” says Carmi Levy, an independent technology analyst and journalist. “If you look at the terms of use statement, it makes it very clear that you’re accessing a service that you didn’t pay for and you’re violating the terms of use.
“Now, will police come to your door and arrest you and take you to jail? Probably not. I’m pretty sure in most countries around the world they’ve got much better things to do with their time. Morally, it does open up a bit of a Pandora’s box. It really isn’t the right thing to do because you are getting something for free and you should be paying for it.”
ListenTolerating sharing is ‘almost part of…marketing plan’
Levy thinks millions of Canadians are watching Netflix without subscribing to the service, and they don’t think it is a big deal. And why does Netflix not pursue them? “What Netflix wants to do is to convince us that ‘Hey, you should buy a streaming service as well.’ But you don’t just walk up to someone and say ‘I think you should subscribe right now.’ (Instead) you let them try it a for little bit, you give them a free trial. You let them decide for themselves for a few months if this is something that they’re willing to pay for.”
Levy thinks password-sharing is almost part of Netflix’s marketing plan to increase subscriptions. Traditional carriers in Canada are also starting their own streaming services and they are exhibiting the same tolerance for sharing. Levy says they may even be willing to lose money on the services because they are selling other products like internet, phone and cable.
Soon ‘time for you to pay up’
But the free ride is not likely to last, says Levy. “The clock is ticking,” he says. Right now Netflix and other streaming services are tolerating sharing service, but “it will take about five years for all of us to get into the habit and then they’re going to start tightening the screws a little bit and say ‘now is the time for us to start making money on it. You’ve been getting it for free for a while. We’ve looked the other way. No more. It’s time for you to pay up.’”
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