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By Ian Salisbury
October 9, 2015
Shia Labeouf and Michael Douglas in WALL STREET: Money NEVER SLEEPS, once available on HBO Now
Shia Labeouf and Michael Douglas in WALL STREET: Money NEVER SLEEPS, once available on HBO Now
Barry Wetcher—20th Century Fox/courtesy Everet

It’s no secret that young people like to consume entertainment they don’t necessarily pay for.

But when business and tech types talk about this reality, they tend to use neutral or even flattering language: Millennials, they say, like to “swap” files and “share” subscription passwords. After all, super-earnest, bike-commuting, coffee-sipping twenty-somethings don’t look like dangerous criminals. And let’s face it, no business wants to alienate the work-force’s largest generational cohort, with billions, if not trillions, worth of spending ahead of it.

But now some Wall Street analysts have decided to come right out and use another S word—steal—in discussing the problems facing some traditional media enterprises.

“The millennials are a generation that grew up (and will likely grow old) ‘sharing’ (read stealing) passwords for access to content if it continues to be ignored,” wrote analysts Mike McCormack, Scott Goldman, and Tudor Mustata in a note to clients Tuesday. “We believe it is the most significant cause of the declining pay TV subscriber base.”

Read Next: How to Watch All the TV You Want Without Paying for Cable

The problem, the analysts suggest, is that all this sharing/stealing could quickly destroy the cable TV business. That’s hardly a far-fetched argument. Similar trends have already gutted the music and news industries.

The Jefferies analysts argue password sharing is already “the most significant cause of the declining pay TV subscriber base.” They compare the current situation to a time when people jury-rigged access to cable with “illegal cable drops, third-party set tops and reprogrammed satellite cards.” Revenues returned only when the industry cracked down.

Of course, no one likes to be called a crook. Millennials might counter that the situation isn’t totally black and white. The music industry has evolved. And sharing streaming TV passwords isn’t clearly against the rules. Passwords for the streaming service HBO Now, for instance, are limited to a household, but the company has been vague (presumably on purpose) about what that means. Netflix, Amazon, and others all have policies that similarly attempt to both acknowledge and limit sharing.

Read Next: The Real Rules for Sharing Passwords for HBO Now, Netflix, Amazon, and Hulu

The solution? The analysts call for companies to adopt tougher rules with emphasis on “authentication limits”—essentially limits on how many people can use a log in at the same time, which some sites like Netflix and Hulu already employ. But they also acknowledge the scope of the problem—and the fact that, let’s face it, it’s not just millennials. “It is difficult to meet someone (of any age demo) that hasn’t used or allowed another to use content passwords,” they lament.

Read Next: Netflix Is Getting More Expensive

 

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The purpose of this disclosure is to explain how we make money without charging you for our content.

Our mission is to help people at any stage of life make smart financial decisions through research, reporting, reviews, recommendations, and tools.

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Our content is free because our partners pay us a referral fee if you click on links or call any of the phone numbers on our site. If you choose to interact with the content on our site, we will likely receive compensation. If you don't, we will not be compensated. Ultimately the choice is yours.

Opinions are our own and our editors and staff writers are instructed to maintain editorial integrity, but compensation along with in-depth research will determine where, how, and in what order they appear on the page.

To find out more about our editorial process and how we make money, click here.

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