Impatience and price motivate consumers to watch pirated content and borrow SVOD passwords

For most US households (88%), having at least one streaming video on-demand (SVOD) service is commonplace; the average household pays for four subscriptions.¹ Still, some consumers turn to other methods, like using someone else’s SVOD password or watching pirated TV shows and movies, to access media and entertainment content. These tactics—though a violation of the providers’ terms of service—may seem like easy and harmless ways for consumers to watch what they want while saving money on ever-increasing subscription fees. But for streamers and studios, these unauthorized methods have a substantial impact on their bottom lines.²

Data from Deloitte’s Digital Media Trends study finds that a quarter of consumers surveyed (25%) admit to either using someone else’s SVOD password or watching pirated TV shows or movies in the previous 12 months. Password borrowing is more prominent among consumers than watching pirated content: Fifteen percent of respondents use someone else’s SVOD password, compared with 7% who watch pirated TV shows or movies, and 4% who do both. Gen Zers and millennials—perhaps due to a higher level of tech-savviness or lower amounts of disposable income—are more likely to report being password borrowers and pirated content watchers.

For streaming video providers looking to curb these behaviors, understanding the motivations of these consumers may be illustrative.

Password borrowers, for example, appear motivated largely by a desire to save money. More than one-third (35%) of borrowers say they don’t want to pay for a streaming video service, compared with a smaller share of pirated content watchers (18%) who say the same. However, it may be worth noting that password borrowers are just as likely as consumers overall to pay for SVOD subscriptions, and they have roughly the same number of services in their homes, too. So, while it’s unlikely that they rely solely on borrowed credentials to access streaming services, they may be hitting their limit: The majority of borrowers (73%) are frustrated that the entertainment services they subscribe to continue to raise their prices, and 53% have cancelled, or churned through, a paid streaming video service in the previous six months (compared with 40% of consumers overall). More than half of password borrowers surveyed say they would cancel the subscription to their favorite SVOD service if the monthly cost increased by US$5. These sentiments could be contributing to password-swapping behaviors.

Alternatively, consumers who watch pirated content want convenient access. They are less likely to say that streaming services are worth the price, and they are more likely to churn. Some 40% of pirated content watchers surveyed say they do so to get quick access to content they want to watch, compared with 18% of password borrowers. Pirated content watchers are more critical of the value of entertainment offerings on streaming video, with half of this cohort saying the content available on SVOD isn’t worth the price (compared with 36% of consumers overall). Likewise, 46% of pirated content watchers (compared with just 27% of overall respondents) say they would prefer to pay to watch individual shows and movies versus having to pay for a monthly subscription. These points are further illustrated by a significantly higher churn rate (62%) among pirated content watchers when compared to respondents overall—along with a much higher churn-and-return rate (51% compared with 21% of consumers overall)—suggesting that this cohort cycles through SVOD services and offerings and visits unauthorized sites in search of the entertainment content they want to watch, when they want to watch it.

SVOD providers have put considerable effort into monitoring and combating both password-sharing and piracy. Boosting subscriber bases and revenue are critical for industry and individual providers that have struggled continuously with profitability and consumer retention.³ Thinking creatively about why people turn to unauthorized methods of accessing content—and providing paid offerings to meet the demand—could turn pirated content watchers and password borrowers into paying customers.

Key takeaways

• SVOD providers should consider partnering with cybersecurity experts and cloud providers to protect their content from being pirated and shared illegally online—leveraging encryption and blockchain technologies and AI-monitored detection systems. Providers could also work to educate consumers about the dangers of accessing pirated content and implement systems for community reporting.
• Streaming providers should continue to explore lower-cost, ad-supported pricing tiers⁴ and pay-per-view models to make content accessible and to expand their user base. Password borrowers and pirated content watchers surveyed are just as likely as consumer overall to subscribe to an ad-supported tier of a paid streaming service. Reducing the cost of SVOD basic services might attract these value-conscious viewers and prevent churn. Password borrowers and pirated content watchers are more likely than the average consumer to watch a free, ad-supported streaming TV (FAST) service. FAST could be a way to bring them from the sidelines into revenue-generating services.
• SVOD providers should delve more deeply into the motivations of pirated content watchers. They often want full, uncensored versions of content that they can’t find elsewhere—and they want it quickly. Looking at ways to meet those desires within the boundaries of a paid subscription could pay off for providers.