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Sharing passwords keeps streaming services all in the family

It shouldn’t come as a surprise that Americans love streaming their entertainment.

Earlier this month, I wrote that live-TV watching is becoming a thing of the past, as nearly half of all Americans say they prefer to stream their shows and movies through online services such as Netflix, Hulu and Amazon Prime.

What is interesting, however, is that many of these people who are signing in online to watch their favorite episodes aren’t paying for it.

Recent research from Parks Associates found that 11 percent of Netflix users are watching their shows on someone else’s account. Similarly, 10 percent of Hulu Plus users say they watch via an account not under their name. However, the research found that people don’t tend to share passwords when it comes to Amazon Prime, likely because doing so could authorize someone to make purchases from their account.

According to the study, “account sharing is highest among younger households.” In fact, more than 20 percent of Americans between 18-24 years old are using a streaming subscription paid for by someone not living within their home.

However, other research indicates that sharing account passwords is more widespread than 11 percent. According to a 2014 survey from the Consumer Reports National Research Center, 46 percent of Americans say they’re sharing their streaming media accounts with people outside of the home.

But is this legal, especially as online account sharing becomes increasingly more common?

To be short, the answer is yes — for now, because streaming services haven’t done much to prevent users from sharing accounts.

Currently, Netflix allows users to stream up to four shows at once, and seemingly encourages such behavior by allowing users to assign profiles to each person who signs in. Similarly, Amazon Prime allows users to stream up to two shows simultaneously, and their terms of service policies concerning account sharing are vague.

In an interview with Consumer Reports, Netflix spokesman Cliff Edwards said Netflix isn’t interested in punishing cheaters. In fact, Edwards said that such topic is “honestly not even a conversation in the company right now.”

But just because streaming services aren’t looking to crack down on people who share log-in credentials, it doesn’t mean they aren’t aware of what is happening.

Netflix CEO Reed Hastings, for example, understands that users share accounts with friends and family members, but hopes that they don’t go so far as to abuse the privilege.

“We usually like to think that a husband and wife can share an account and that’s perfectly appropriate and acceptable,” said Hastings in a 2013 earnings call. “If you mean, ‘Hey I got my password from my boyfriend’s uncle,’ then that’s not what we would consider appropriate.”

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