Not just Netflix, password-sharing plagues Indian OTTs too; but they are looking away

OTT player OHO Gujarati once had a user whose account was used to log in from 79 unique devices, says Co-Founder Abhishek Jain. Indian OTT players are no strangers to the problem plaguing Netflix – the California-headquartered streaming giant has blamed 100 million households sharing passwords as one of the reasons for its slowing revenue growth.

“Of course, password sharing is hugely prevalent in India and this is something all OTTs are facing,” says Jain. The problem of shared passwords is 4x-5x in India, estimates Kurate Digital Consulting’s Founding Partner Uday Sodhi. The former Sony LIV head explains that for every paid subscriber, there are 4-5 people using the account by sharing passwords and without paying.

But it’s not an easy problem to solve, he adds. “Premium accounts allow 3-4 devices to connect using one account. Then, how will you identify who is sitting behind those devices and how will you stop them? 200 students in a hostel may be using the same account across five devices. But at one point, only one or two people will be using it. The issue is when it is shared within a building or among a family or between cousins and friends," says Sodhi.

Abhishek’s team at OHO had to eventually implement a device restriction policy after they discovered the 79 different devices using the same account. They have also stepped-up OTP usage for logging in. “It, however, hasn’t worked effectively to curb password sharing. A huge difference can be made (to revenues) by curbing this problem,” he admits.

But unlike Netflix, which says it is now working “super hard” to fix this problem as their growth slows and they are losing subscribers, the Indian OTT players are choosing to look away because there is still comfortable headroom to amass subscribers.

India currently has about 40 million paying OTT subscribers. Meanwhile, cable TV penetration is to the tune of 150 million. Besides, the Indian OTT subscription pricing is still lower than global prices.

But OTTs worldwide will create multiple barriers to get people to buy their own accounts and incentivise single-account paid ownership, and Indian OTTs will also follow suit eventually in trying to find a solution for this, says Sodhi.

Netflix, for instance, tested a pilot with users in Chile, Costa Rica and Peru to allow primary account holders to add up to two users outside their households for a small fee. Over the next year or so, Netflix plans to start monetising account-sharing globally.

It expects the revenue boost to show up in the form of increased ARM (average revenue per member) and engagement as opposed to an increase in subscriber count.

Abhishek says the only way out is through technical innovation, adding that they have raised this issue with their technical team.

“This rampant log-in and log-out from the same account through different devices is something most OTTs will need to start looking at,” says Sodhi, quickly adding that the harder you make it to share passwords, the higher is the risk of driving away users. He expects the problem to take a long time to get solved as OTT players can only tighten the noose slowly.