A US court has ruled that the sharing of passwords, such as Netflix or HBO Go accounts, is now technically a federal crime.
In a July 5 ruling in a case about a former employee at executive-search firm Korn Ferry, a three-judge federal appeals court panel found that sharing passwords without authorisation is a crime that can be prosecuted under the US Computer Fraud and Abuse Act.
A study last year by research firm Parks Associates suggested SVOD services would stand to lose upwards of $500 million in revenue in 2015 from the practice of sharing passwords.
However other research suggests password sharing of SVOD is not at epidemic levels. A little over 4% of subscribers said they share their password outside their family circle, while 42% say they share it with family members.
Netflix has so far taken a relaxed position on the sharing of passwords with a family unit. Customers can assign up to five different profiles to different members of the family to have their own personalised experience and watchlists.
“We love people sharing Netflix whether they’re two people on a couch or 10 people on a couch,” CEO Reed Hastings has said. “That’s a positive thing, not a negative thing.
“As kids move on in their life, they like to have control of their life, and as they have an income, we see them separately subscribe,” he added. “It really hasn’t been a problem.”
Outside the family, the situation is a lot more complex.
Source: Chicago Tribune