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DStv picks nuclear option to crack down on password-sharing

February 23, 2022
DStv picks nuclear option to crack down on password-sharing

Pay TV group MultiChoice has announced that from March 22, subscribers will only be allowed to stream DStv content on one device at a time. This applies to both library/on-demand content as well as live channels. Currently, subscribers are able to stream concurrently on two devices.

It says these “measures to limit concurrent streaming” are being introduced in light of “password sharing and piracy” which are “challenges for streaming providers globally”. The changes will be “made to all DStv subscriptions across Africa, however, only customers making use of more than one concurrent stream will be directly affected by the change”.

It asserts it is not limiting “the number of people using a login”, although the new limit effectively does just that. The limit of four registered devices for streaming remains unchanged. Customers will also be able to still watch previously downloaded content on a second device.

That the change is being made with such an aggressive timeline – customers are being provided with just 30 days’ notice – and ahead of its financial year-end suggests that the pay-TV operator is acting from a position of weakness. Subscriber numbers of its top-tier (Premium and Compact Plus) offerings have been under pressure for a number of years as competition from rivals, particularly Netflix, intensifies.

Judging from anecdotal evidence, many customers share logins across families or friend groups. This has been enabled to a large extent by the rapid adoption of uncapped fibre access by consumers. This typically enables one party to watch live football, for example, and another to watch on-demand or lifestyle content at the same time with only one subscription. In certain instances, this sharing is even formalised to the extent that both parties share the subscription cost. This is particularly common among younger viewers.

One could argue that with this change, MultiChoice is actively reducing the value provided to customers. People who use shared logins in the same household ‘legitimately’ will now no longer be able to watch different live or on-demand content simultaneously. The effective limit (without additional decoders) will be two different channels at the same time (one on the primary decoder/TV and another, streamed, on a tablet/phone/smart TV). It is somewhat astonishing that its most valuable customers, those on Premium, who will pay R949 per month from April are being restricted in this way. But, the operator may argue that it is precisely this base that it is trying to shore up.

Netflix offers four simultaneous streams on its top plan (Premium, R199 per month), with two concurrent streams available on its Standard plan (R159 per month). Showmax – owned by MultiChoice – limits subscribers to two simultaneous streams. DStv says this limit will not change. Investors have long pressured Netflix on acting on account/password sharing, but the platform has until now not cracked down on this practice.

Although it has been slowly tightening controls on password-sharing, which it has publicly acknowledged is a delicate process. On its earnings call in April last year, Co-CEO Reed Hastings said “We test many things but we would never rollout something that feels like turning the screws” on consumers. “It’s got to feel like it makes sense to consumers, that they understand it.”

In limited tests, it has been detecting usage by people who do not live together and has been prompting these viewers with a message that reads “If you don’t live with the owner of this account, you need your own account to keep watching.” These viewers are then asked to verify their identity with a one-time PIN sent via an SMS or e-mail which is sent to the account’s owner.

On that same call, chief operating officer and chief product officer Greg Peters described this focus on limiting password sharing as a way of “continuously improving the service”. While it provides “the plans with the right features and the right price points” in its various markets around the world, he says its goal is to be sure “we’re good at making sure that the people who are using a Netflix account — who are accessing it — are the ones who are authorised to do so.”

Citi analyst Jason Bazinet estimated last year that Netflix and other US streaming video services lose about $25 billion a year in potential revenue due to password sharing. With Netflix accounting for about a quarter of the market, it is potentially forgoing approximately $6 billion in revenue.

It must be noted that in the UK, Sky limits concurrent streams on ‘Sky Go’ to two devices. On its high-end subscription offerings (targeted at entire households), this limit is four.-moneyweb

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Last modified on Thursday, 24 February 2022 18:45
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