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You are here: Home / After Hours / Tennessee Bans Subscription Sharing
Tennessee Outlaws Sharing Netflix, Hulu Passwords
Tennessee Outlaws Sharing Netflix, Hulu Passwords
By Jennifer LeClaire / CRM Daily Like this on Facebook Tweet this Link thison Linkedin Link this on Google Plus
PUBLISHED:
JUNE
02
2011
To combat a new generation of entertainment thieves, Tennessee Gov. Bill Haslam has signed legislation that makes sharing passwords to subscription entertainment services like Netflix and Hulu Plus a crime.

Even if you have a friend's permission to use the password, lawmakers have moved to make it illegal to listen to songs or watch movies on subscription services that you aren't paying for -- unless you are with the subscriber. The law aims to stop the revenue bleeding for movie, TV and music producers.

"What becomes not legal is if you send your username and password to all your friends so they can get free subscriptions," said the bill's House sponsor, state Rep. Gerald McCormick. Consumers caught stealing $500 or less worth of entertainment services will face misdemeanor charges, including up to a year in jail and a $2,500 fine, according to the Associated Press. Stealing more than $500 worth constitutes a felony.

Stealing Subscriptions

Rob Enderle, principal analyst at the Enderle Group, compared stealing Netflix or Rhapsody subscription services to pirating cable. In the early days of cable, he noted, neighbors would get together and share the cost of the service. In today's modern world, he explained, the same thing happens with Netflix, and the new law aims to deter the behavior.

"These services are supported by people that pay for them and the licenses for the movies are for individual households. The licenses are not designed or funded to move across households or neighborhoods unless it's expressly provided as a service. So, in effect, it's theft," Enderle said.

"To preserve the financial model of the providers, it appears the government is moving to protect these services much like they moved to protect the cable providers when people were stealing cable," he added. "This new law is just an adjunct to older legislation. We are now moving to streaming and the laws are being adjusted to address the new delivery model."

Cord-Cutter Survey

The Tennessee law comes as pay-TV providers are at risk of losing Generation Y subscribers who are less attached to traditional television and more prone to finding a greater cost-benefit equation with alternative viewing platforms, according to a survey by Ideas & Solutions! called Must Choose TV: What Gen Y Thinks About Pay-TV and Cord-Cutting.

Those considered most likely to cut their pay-TV service -- from cable, telecom or satellite providers -- are, not surprisingly, the strongest consumers of alternative viewing options. Of those deemed most at risk of cord-cutting, nearly 50 percent use Netflix and Hulu. Conversely, only 29 percent of "Loyalists" use Netflix and 25 percent watch TV via Hulu. Among "Leaners," 42 percent use Netflix and Hulu.

"While the media has focused much of its reporting on the extent of cord-cutting overall, there is little mention of the behaviors and attitudes of vulnerable groups within this key constituency," said Glen Friedman, president and founder of Ideas & Solutions! "This is the demographic that completely transformed the music and the phone business and has already started to dramatically reshape the pay-TV ecosystem."

Tell Us What You Think
Comment:

Name:

Chris:
Posted: 2011-06-02 @ 10:26pm PT
Im seriously pissed off at our low-life governor. My wife teaches in Peru, South America. We watch netflix together, kind of like watching movies. Now this is just a slap in the face to us, thanks.

Linda Day Harrison:
Posted: 2011-06-02 @ 3:58pm PT
Please keep the government out of this! Let the innovators and creators combat their own "shrinkage." The less we permit the government to get involved the better. Is this just like any other crime? Why is it different? It is stealing. That is already a crime.

Imthe Guvner:
Posted: 2011-06-02 @ 2:51pm PT
Gimme a break !!!
Nashville called and TOLD him what to do. And then gave him a little $$$$ for his re-election campaign.

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