Beware all you password sharers, a crackdown may be coming.
Charter Communications (CHTR - Get Report) CEO Tom Rutledge, whose company is close to acquiring Time Warner Cable (TWC) , said on Monday that video streaming services are letting revenue slip away by allowing password sharing to proliferate. Password sharing, he said, has become an increasingly large problem, especially among college-age students.
"It's a big deal," Rutledge said at a investor conference hosted by UBS. "If you ask people at colleges, they all have someone else's password. It's a hard sell now. They have a password for all the over the top services that their parents have."
Password sharing has escalated as the number of video streaming subscription services have mushroomed. Not only are people sharing passwords for cable-TV service, such as Charter, Optimum, Verizon FiOS and others, they're also sharing passwords for any number of online streaming services. Rutledge didn't name names, but online subscription video services that launched in 2015 include Time Warner's (TWX) HBO NOW, CBS's (CBS - Get Report) All Access and Viacom's (VIAB - Get Report) Nogg'in.
It's not uncommon to find one subscription is being streamed concurrently in 15 different cities around the country, Rutledge said. In one instance, he cited, a content company has one single account with 30,000 concurrent streams.
"The real problem is that content companies created their own sites, and they're streaming their own content but there's no uniform control over the streaming," Rutledge said. "It is an unmanaged churn."
Cracking down on multiple password usage is well within the means of content companies, if they choose to make it a priority, the CEO stated. "It could be determined and should be determined," Rutledge said. "What really floors me is the complete lack of consciousness about it.
At a time when cable-TV and satellite services are losing about one million subscribers a year, Rutledge said a crackdown on password sharing could help to shore-up revenue.
"You can build algorithms to reduce unauthorized usage," he said.
To close its $79 billion acquisition of Time Warner Cable, Charter still needs to win approval from the Department of Justice and the Federal Communications Commission as well as state regulators in New York, Hawaii and California, he said. California regulators, Rutledge added, want to push out an approval date further into the future, but he said Charter has been pushing for a quicker approval process.
"I can't give you any specific date, but we're working on it," he said, adding that Charter hasn't provoked the kind of public opposition that was sparked during Comcast's (CMCSA - Get Report) failed attempt a year ago to acquire Time Warner Cable.
"We're going to be smaller, and we're not vertically integrated," Rutledge said, a reference to Comcast's ownership of NBCUniversal. "We haven't attracted the kind of concerns that that previous deal did. I think it's moving a long well."