Subscription Piggybackers Would Drop Streamers if Required to Pay for Own Account, per Report
Password sharing has been a major part of the streaming world since its inception, but as the industry approaches a saturation point and prices continue to rise, many streamers might be coming to a breaking point in that regard. As nearly four out of 10 Americans are “borrowing” someone else’s streaming subscription, 45% of those consumers would drop the specific service if they lost account access, according to recent studies and surveys by LendingTree.
In March 2022, Netflix announced its plan to reduce password sharing across its platform, increasing prices for those wishing to have additional members on their accounts. While LendingTree surveys suggest that 38% of Americans are sharing their streaming service passwords, Netflix isn’t likely to be adding all of those piggybackers to its subscriber totals. In fact, more than half of consumers (55%) feel that sharing the service is completely fair to the company.
This is in stark contrast to a survey of 504 Netflix users performed by the Variety Intelligence Platform and CRG Global partnership. That study suggests that 65% of current account piggybackers would indeed pay full price for their own subscription or would be willing to pay more for their own account to continue allowing others to do so. However, the study did coincide with LendingTree’s findings that users aged 25-44 (Gen Zers and Millennials) are more likely to skip out on the service entirely rather than incur additional monthly expenses.
This outlook comes at a time when inflation is rising across the globe and streamers are increasing their subscription costs to compensate. Meanwhile, nearly three-quarters of Gen Z consumers (71%) have never needed to pay for a subscription as they continued to use their parents’ plan, which makes it a tough sell to convince new subscribers that streaming content is worth the additional monthly charge. In addition, Baby Boomers living on a fixed income may find it difficult to justify cost increases simply to retain access to media they may not be invested in anyway.
On average, 40% of American subscribers pay over $50 per month for their streaming services, and that’s without taking password sharing into account. Since lowering expenses has historically been the driving force behind cord-cutting, the trending price hikes may have consumers shying away from multiple subscriptions.
A recent study from the NPD Group found that increasing costs is the No. 2 reason why consumers drop subscriptions. Therefore, it makes sense that “forcing” consumers to pay for content that they previously had “free” access to might not be worth it for streaming services.
The NPD Group study did suggest alternatives for streamers looking to bolster their market base. Ad-supported video-on-demand (AVOD) subscription tiers offer an excellent way for services to drop prices for customers while simultaneously reaping huge ad-based profit. Current trends indicate that AVOD subscriptions are on the rise thanks to their lower price point and are even expected to pass subscription video-on-demand (SVOD) adoption by the end of 2022. Netflix is poised to see a projected 20% uptick in profits with the advent of its own AVOD subscription tier by the end of this year.
Cord-cutting has always been positioned as a cost-saving venture, and sharing passwords continues to be a way for many consumers to retain access to some of their favorite content while keeping costs down. As streamers search for ways to curb such “abuse,” a turn to AVOD subscriptions may offer the lower prices that consumers crave in order to keep them streaming even if they’re no longer piggybacking on someone else’s account.