The cost of cord cutting has been going up, and there are many factors for that. From local channels wanting even more money to piracy, cutting into the number of customers paying in to help keep costs low.
Now according to Parks Associates, in 2023, piracy and password sharing are costing streaming services $20 billion in revenue. That number is expected to keep growing, and by 2027 the total cost of piracy could cost streaming services over $113 billion.
“While there is some optimism that emerging countermeasures and best-practices may see piracy begin to plateau by 2027, there is no consensus among stakeholders as to when it may begin to decline,” said Steve Hawley, Contributing Analyst, Parks Associates, and Managing Director of the Piracy Monitor industry newsletter and consultancy. “This research provides a much-needed understanding of the issues at hand and the technologies and approaches available to fight piracy.”
Piracy may be a significant part of this as it brings no revenue into streaming services, but password sharing is also hurting cord cutting.
“The number of households who share account credentials and consume pirated content is rising. People are increasingly looking for new ways to satisfy entertainment needs,” said Sarah Lee, Research Analyst, Parks Associates, and contributor to the report. “Participation in sharing account credentials increased 48% since 2019.”
Piracy and password sharing result in less revenue to pay creators. As creators demand more money to make up for the loss, streaming services are forced to charge more. This means cord cutters who pay for the services have to make up for the loss of others who do not but still watch the content.
Recently there have been moves to crack down on piracy services and password sharing. A growing number of content owners have been pressing charges against the owners of piracy services. We are also seeing services like Netflix crack down on password sharing.
The question now is how successful these efforts will be in stopping piracy and stopping password sharing.