The demand for streaming services has increased as people stay at home during the COVID-19 pandemic. The Manifest surveyed 401 people about their streaming habits and found that Netflix is the most popular streaming platform by far. The platform may be losing revenue given that 37% of people share their passwords with people they don’t live with, though.
“Are you still watching?”
The screen flashes as Netflix asks if viewers are still there and watching their favorite TV shows. In May 2020, the answer to this question is increasingly “yes.”
People’s daily habits have changed as they are told to stay home, work remotely if possible, and “socially distance” themselves from others to prevent the spread of the COVID-19 virus.
As people stay home, the demand for in-home entertainment has increased.
The Manifest surveyed 401 people about their streaming habits and how they may have changed during the novel coronavirus pandemic.
We found that almost half of the U.S. (47%) increased their streaming time in the past 30 days.
Are streaming services seeing a corresponding increase in profit? Possibly not, since The Manifest also found that a significant number of people are sharing passwords with friends and family they do not live with, which may harm streaming companies’ revenue.
Netflix stock, for example, continues to grow significantly during COVID-19, but the company may not be seeing as big of a payoff as it would like due to Netflix password sharing.
- Three-quarters of people in the U.S. (75%) pay for Netflix, making it the most popular streaming service by far. Meanwhile, around half of the U.S. (56%) pays for Amazon Prime Video, and more than a third (40%) pays for Hulu.
- One-third of subscribers (36%) share their streaming service subscriptions with 1 to 2 other people, while more than a quarter of subscribers (27%) share it with 3 to 4 people.
- The majority of people who share their streaming service subscriptions (74%) share it with the family they live with. However, 37% of people share it with family, friends, and strangers they do not live with, demonstrating a large potential revenue loss for streaming platforms.
- Almost half of people (47%) say their streaming habits have increased in the last 30 days, while a third of subscribers (36%) say they continue to watch the same amount during the COVID-19 pandemic.
Netflix Dominates the Streaming Media Industry
With traditional cable TV providers losing 6 million subscribers in 2019, streaming platforms such as Netflix and Hulu represent the future of media content.
Three-quarters of people in the U.S. (75%) pay for Netflix, demonstrating the rapid growth of its user base and revenue.
Meanwhile, more than half of people use Amazon Prime (56%), and more than a third (40%) pay for Hulu (owned by Disney).
So, why is Netflix beating Amazon and Hulu?
- Netflix was the first streaming service.
- Netflix offers the most original content.
Netflix Launched the First Streaming Platform
In 1997, Reed Hastings founded Netflix as an alternative to Blockbuster for DVD rentals. His goal was to create a platform where people could go online, request DVDs, and then Netflix would ship it to them as a rental.
Hastings, however, soon realized that streaming movies online eventually could replace DVDs.
In 2007, Netflix became the first streaming platform in the world. By being the first, Netflix gained publicity and had few competitors in its early months. Hulu quickly followed in 2008, but the two platforms provided different types of content:
- Netflix focused on offering a large library of films.
- Hulu showcased recent network TV.
These different approaches allowed the two platforms to gain overlapping audiences because they each offered something unique.
Still, Netflix grew more quickly based on its movie collection and easy-to-use interface. Even today, Netflix is available globally, while Hulu only remains available in the U.S.
Netflix became popular as the first streaming platform available. It transformed the entertainment industry, encouraging people to leave traditional cable behind.
Netflix Started the Original Streaming Content Trend
Netflix may have started as an online film library, but it quickly became known for its dedication to producing high-quality, original shows.
In 2013, Netflix launched its first original show, “House of Cards.” The show gained enormous popularity due to its fast-paced script, impressive production quality, and high-profile actors. It won multiple Golden Globes and Emmys before losing popularity after sexual assault allegations were made against the lead actor, Kevin Spacey.
"House of Cards", however, also changed how people viewed television forever. Netflix released an entire TV season all at once, rather than spaced out by episode. People could watch the entire season all within the day that it was released.
Defined now as “binge-watching,” people can watch as much of a TV show as they want without having to wait a whole week for the next episode.
Netflix continues to add to its original content collection, which now includes popular shows such as “Stranger Things,” “Orange Is the New Black,” “Black Mirror,” “Bloodline,” and “The Witcher,” which millions of viewers watch each year. From 2013-2019, “Orange Is the New Black” alone raked in 105 million viewers, making it the most-watched Netflix original show in history.
Netflix has more than 167 million subscribers worldwide and generated $20 billion in 2019. Prior to the COVID-19 pandemic, the company planned to spend $17 billion on developing original content in 2020 as it continues to lead the streaming industry.
Three-Quarters of People Could Be Netflix Password Sharing, Cutting Into Netflix’s Potential Revenue
People share their streaming service passwords to save money, even though it may technically be against the streaming services’ official policies.
Three-quarters of streaming customers (74%) share their accounts with at least one other person, saving money on their media costs.
One-third of people (34%) share their password with 1 to 2 others.
Meanwhile, around a quarter of people (27%) share their accounts with 3 to 4 people. About 13% share it with more than 4 people.
By sharing accounts with others, customers are decreasing the streaming platforms’ revenue growth.
Let’s look at an extreme example of Netflix password sharing and theoretical loss of revenue.
Netflix has 187 million subscribers. If 27% share their password with 4 people, then Netflix may actually have 4 times that number of subscribers (approx. 389 million).
The average Netflix subscription costs $12.99 per month, so the platform could be losing billions each month due to shared accounts.
While the above example is hypothetical, it does showcase the consequences of password sharing for streaming platforms.
Subscribers Commonly Share Streaming Passwords Outside Their Household
Netflix’s model has always been about sharing content within a household, which is why you can create multiple watching profiles within an account.
The Manifest found that 74% of people share their streaming passwords with family members they live with, but 25% share their accounts with family members they don’t live with.
Meanwhile, 12% of people share an account password with friends or acquaintances outside of their homes. This means that 37% of people are sharing their account passwords with people they do not live with.
This out-of-home sharing goes against most streaming platform’s policies.
Netflix, for example, created its multiple-profile platform only for people within the same household to share one account.
Today, Netflix’s terms and conditions say, “The Netflix service and any content viewed through the service are for your personal and non-commercial use only and may not be shared with individuals beyond your household."
More than one-third of the U.S. population blatantly ignores these terms, with 37% giving account access to people outside of their homes.
If 37% of people are sharing their passwords with people they do not live with, streaming services could be losing billions of dollars each month. With this loss in revenue, streaming platforms have less funding for original content and licensing for non-original shows, which makes them less competitive.
Streaming Platforms Crack Down on Piracy, Including Netflix Password Sharing
In 2019, Netflix began to crack down on Netflix password sharing, calling the trend “piracy.” On October 30, 2019, the Alliance of Creativity and Entertainment (ACE) announced it was launching a task force dedicated to “reduc[ing] unauthorized access to content,” specifically focusing on streaming services password sharing.
Getting rid of piracy, however, is not only a technical challenge but also a marketing challenge for competitive streaming services.
The streaming market is now crowded with enterprise giants including Netflix, Amazon, Disney, Apple, Facebook, and Google (YouTube). If someone only has $25 a month for streaming entertainment, they can now choose which services they want to pay for and may not pick the streaming service with stricter password-sharing regulations.
Password sharing is a huge trend among streaming users but also represents a significant loss in revenue for companies spending billions on original content.
Almost Half of People Increased Streaming Use in Last 30 Days Due to COVID-19 Pandemic
As COVID-19 spreads globally, people find themselves spending more time at home and, as a result, streaming more media.
Almost half of people (47%) say they increased their time on streaming platforms in the past 30 days. The Manifest collected this data from April 7-10, 2020.
Meanwhile, more than a third of people (36%) say their viewing habits stayed the same. Only 5% of people say they watch less television now than 30 days ago.
Streaming companies are seeing their value grow as people invest more time and money in streaming platforms.
Netflix added 15.77 million new subscribers globally in the first quarter of 2020, more than double what it forecast. Netflix stock increased 14% since the beginning of the year, which is expected to keep growing in the next few months as the pandemic continues.
Disney+ just reached 50 million subscribers after its launch in November 2019, which is a feat that took Netflix 7 years to do. While Disney takes a revenue hit from its parks being closed due to COVID-19, Disney+ subscribers grow as people stay home and watch its content.
Still, while streaming hours grow, streaming services may not see a substantial increase in revenue by the end of the year.
As COVID-19 Pandemic Increases Streaming Time, Piracy Also Increases
Piracy rates also increased dramatically since the beginning of the pandemic, indicating a willingness to watch but an unwillingness to pay.
The 2014 app Popcorn Time, which allows people to stream Netflix content illegally, surged in popularity in the past month.
Furthermore, people enjoy other illegal streaming sites as well. Chris Blachut, the co-founder of humor and lifestyle blog The Unconventional Route, explained how illegal streaming can offer a larger variety of content.
“When there's a show I really want to watch that's not on Netflix (or any other platform, for that matter), I'll find illegal streams online,” Blachut said. “The video quality is lower, but I'll take that trade-off if I believe I can get higher-quality entertainment than whatever Netflix is trying to push on me.
Blachut explains how some illegal streaming sites have better recommendations as well.
“Honestly, I like the illegal streaming sites best,” continues Blachut. “Netflix could earn some points if it did a better job with their recommendations to help me discover hidden gems on their platform and not their Netflix originals.”
While streaming services see an uptick in platform use during the COVID-19 pandemic, their revenue might not match the increased usage.
Streaming Statistics Indicate Growing Popularity of Online Platforms
Streaming services offer an alternative to traditionally expensive cable TV and continue to grow in popularity.
Netflix dominates the streaming service market; 75% of people pay for Netflix, followed by Amazon Prime (56%) and Hulu (40%).
More than three-quarters of subscribers (74%) give their streaming passwords to others. One-third of people share their accounts with 1 to 2 people, and more than a quarter of people (27%) share their password with 3-4 people.
Of this group, 74% of people share their password with the family they live with, and 25% of people share it with family members they do not live with. Meanwhile, 12% of people share their passwords with friends or strangers outside their household, which means that 37% of people share their passwords with people they do not live with.
Platforms such as Netflix may be seeing a huge loss in potential revenue due to password sharing. Streaming platforms are looking for new ways to reduce illegal streaming as piracy rates increase during the COVID-19 pandemic.
Although streaming hours increased during the start of the pandemic, streaming platforms may not see this high growth reflected in their revenue due to the prevalence of password sharing.
About the Survey
The Manifest surveyed 401 people across the U.S. about their streaming services habits.
About 46% of the respondents were female; 33% were male and 20% declined to answer.