Sharing of Accounts and Its Effects on E-commerce

Posted: January 5th, 2023

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Sharing of Accounts and Its Effects on E-commerce

Businesses that conduct their operations through electronic platforms have witnessed a trend users tend to use one account to perform multiple functions, or to enjoy services that they are not eligible to get. Even though more users are embracing the habit, concerns emerge among various operators that the practice presents numerous adverse effects. Some firms have enacted stiffer measures to regulate the habit, but some stakeholders feel that it is unfair to infringe on such practice. Consequently, many questions have emerged that require more focus and attention to address the issues that appear to evoke conflicting reactions among various stakeholders. The tussle comes at a time when the consumption of video content is undergoing significant transformations, and watching one’s favorite shows no longer relies on a set-top box or even a television. Streaming video providers such as Hulu and Netflix have transformed the way people view and think about video content, paving way for out-of-home use across a broad range of linked devices. Nevertheless, with the advancing portability comes risks not related to traditional forms of watching TV and films with the issue of credential sharing being one of the major concerns. The study advocates for regulation of credential sharing to protect content providers from undergoing considerable loss besides other losses.

Meaning of Credential Sharing

Credential sharing is increasingly becoming debatable among online operators and users. The act, also known as password sharing, is any practice that entails a non-subscriber utilizing a subscriber’s code or pin to gain entry or access to video or online content without the subscriber’s presence or outside their household (Cartesian). The situation is that many online and video subscribers freely provide their passwords to family members and friends, permitting the account to be utilized by individuals or groups that do not undergo any financial obligation. An inquiry into the prevalence of password sharing reveal that between 11% and 20% of streaming video audiences are utilizing a shared credential (Cartesian). The practice raises apprehension among service providers who cannot tell how many people are accessing their services without their consent. It is now apparent that more audiences than ever are watching video content over the Internet, across a range of devices and avenues. Viewers in many instances can reach valuable content without buying their own subscription, utilizing stolen or borrowed information such as codes or passwords to bypass conventional access restrictions (Cartesian). For providers of streaming videos, password sharing has become an escalating concern for the over-the-top (OTT) video and pay TV sector. Because cases of credential sharing can vary from permitted formal sharing among family members to absolute fraud, quantifying the magnitude of the practice and the effect on the business requires special approaches and tools to catch these violations at the appropriate time, and to transform customer behavior.   

Impact on Service Providers

The concerns associated with sharing accounts attract the attention of Netflix that thinks that the practice affects its activities, and continues to come up with stricter regulations to curb the act. Upon realizing that password sharing costs the company billions of dollars each year, BBC has reverted to applying stricter measures to discourage the act of password sharing. The group developed a structure that notify non-subscribers to get their accounts (Godwin). Netflix’s spokesperson informed BBC correspondent that the initiative was aimed at encouraging those who are not registered accountholders yet access Netflix videos to consider making their purchase (Godwin). The company, however, is yet to make a decision whether it will roll out the approach across the entire system. In the trial approach, users can confirm they are permitted to gain access into the account through a code or password send through email or text. Netflix, nevertheless, believes that it must accept password sharing exists and the best way is to regulate the practice rather than entirely erasing it (Godwin). Reed Hastings, the company’s CEO and co-founder said during a webcast that credential sharing is something content providers have to learn to cope with, because there are cases of genuine password sharing, like one sharing with his or her spouse, offspring, or best friend (Godwin). However, the company is still committed to minimize password sharing as much as it can.

It appears that credential sharing is pushing subscription rate to go high, a move that would compel subscribers to regulate how non-paying users have access to the platform. Netflix, for instance, heightened the rate of its two-stream offer by $1, and various evaluators, including Goldman Sachs, attribute the adjustment in price to credential sharing, claiming that the new charges would incentivize some customers who share their codes and passwords to choose the one-stream offer and promote accounts with numerous subscribers to elevate to the four-stream plan that presents more amazing offers (Cartesian).

Policy Considerations

Content providers use a wide range of regulations to handle the issue of credential sharing. For instance, companies presently regulate the number of devices while others limit simultaneous streaming. DISH Satellite TV, a U.S. TV provider stationed in Englewood, Colorado is a typical example of a firm that limits accounts to a single viewing session while DirecTV provides buyers five simultaneous streams at any given time (Cartesian). Each of these regulations depict a difference in opinion between offering an efficient service that will be welcomed by genuine account holders, and installing stringent security measures to avert illegal account use and discourage credential sharing.

Even with the need to embrace stricter regulations to avert unauthorized streaming, content providers give diverse pictures of what amounts to satisfactory usage. However, Cartesian believe that the views are likely to change overtime as operators and the market evolve and become more mature. Cartesian believes that the chief reason for the relatively less stringent regulations is that whereas content providers do not want account holders sharing credentials with third parties, they are not ready to risk the share of their market or potential for future growth with new regulations that could affect their present consumer base. The possible scenario is that as the market for streaming videos continues to mature and expansion ultimately falls, charging non-account holders will become an indispensable issue. The matter is a little bit trick for streaming companies, particularly with the level of competition continuing to escalate – over thirty additional firms introducing their facilities in 2015 in United States alone. Some including Cartesian think that the joint effects of dampened growth and expanding industry rivalry will encourage content providers to reassess the issue of credential sharing as a possible avenue for generating additional revenue, as much as coming up with plans to change the recipients of shared credentials to real account holders will still be a daunting task. New entrants to the streaming video sector should also contemplate credential sharing in their first service policies to avert consumer headaches from policy changes and to enhance the chances of generating more revenue. The entry of NBC Universal and AT&T into the streaming video sector at the beginning of 2016 creates the impression that the change towards streaming content does not seem likely to fade away (Cartesian). As audience of conventional pay TV broadcasting continues to shift towards online streaming, interested stakeholders wait to see players in the sector move in to mitigate the issue of password sharing.

Case Study

A renowned communications service provider wanted to know the magnitude and effects of unpermitted password sharing on its TV Everywhere avenue. Unpermitted credential sharing behavior has been an escalating concern for the service provider for quite some time now. The issue also generated much concern among users who raised the concerns to address the magnitude of credential sharing and approximate the financial opportunities of the conforming monetization projects (Cartesian). The group approached the matter by engaging a team of experts who utilized skills from various fields, including technology solutions, data analytics, and other related concepts such as content security to assess the entire issue. The team proceeded to create a high-risk account recognition techniques to know accounts that are likely to be shared among multiple users (Cartesian). The assigned team used its proprietary risk scoring technique, and quantified credential sharing behaviors and recognized accounts that need urgent attention. The group working on the initiative used the findings to provide appropriate users with an overview of the entire threat. The team proceeded to create a password sharing analytics plan to offer unvarying assessment. The group formed various specially designed dashboards accessible through a safe-web-based platform for assessing streaming. The initiative provided valid users to access essential investigation and reporting all the time (Cartesian). The group proceeded to form credential sharing mitigation approaches to form target mitigation initiatives, which made it possible to provide users with mitigation policy suggestions, which focused on limiting devices, user outreach, and two-factor verification. The assigned team also assessed the chances to form advanced monetization plans for the company to consider (Cartesian). The interveners at this stage developed regulations to avert unauthorized activities, and converted password borrowers into clients.

Possibility for Allowing Sharing

However, operators and users can rely on the concept of trust, which has attracted the attention of many scholars in the recent past. Waldman (197) writes that while much of the work on privacy, sharing, and trust online pays attention to either how safeguarding privacy can enhance trust, or on how the view that a perception that one can trust an online platform to safeguard their privacy can lessen the privacy risks that customers are likely to experience. Indeed, when the Attorney General’s office in California and the Federal Trade Commission suggested that online avenues be open about their data practices and privacy so as to encourage the trust of consumers, they refer to the trust buyers have that the online avenues will meet their promises on data privacy and protect consumer data (Waldman 198). An online operator that bases its practices on trust is likely to encourage a condition where sharing of personal credentials and accounts happen without much concern. Waldman (208) gives the example of Facebook as a firm that considers trust as an imperative component in individual’s agreeableness to share personal information on social avenues. The company is built on trust that exists between users and the electronic avenue and between friends. The systems and interface are structured in such a way that it is possible to leverage the trust people have on their friends to intrigue them to share. Facebook believes that providing the privilege helps to formulate a dynamic social community where people learn what friends can help them determine safe ways of interacting with the avenue. Nevertheless, Facebook’s approach already raises some concerns among critics who think that the trust-based design confuses users about the privacy outcomes of their behaviors. Other reviewers think that state and federal privacy and consumers’ protection regulators should intervene to safeguard consumers from losing vital personal information.

Conclusion

The study looks into the issue of password sharing that is becoming a major concern for online content providers, especially for those firms that offer videos. The content providers are justified to restrict non-subscribers from accessing the content because of the many negative outcomes associated with the unauthenticated access. Video providers lose billions of money as a result of the practice that appears to be difficult to regulate now that operators are striving to appeal to more viewers through less restrictive policies. It is quite early to judge how things would turn out in future with more operators still entering the sector. However, it is expected that firms may identify ways for generating revenues through multiple sharing of accounts though identifying additional users may be hard. However, letting the situation to remain as it is now could present more harm to the e-commerce firms.  

Works Cited

Cartesian. “Case Study: Credential Sharing Analytics and Strategies for a Services Provider.” Cartesian, 2021, https://www.cartesian.com/case-study-credential-sharing-analytics-and-strategies-for-a-services-provider/#:~:text=For%20distributors%20of%20streaming%20video,content%20outside%20the%20subscriber’s%20household. Accessed 5 April, 2021.

Godwin, Cody. “Netflix Considers Crackdown on Password Sharing.” BBC, 12 March, 2021, https://www.bbc.com/news/technology-56368698. Accessed 5 April, 2021.

Waldman, Ari. “Privacy, Sharing, and Trust: The Facebook Study.” Case Western Reserve Law Review, vol. 67, no. 1, 2016, pp. 193-223.