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Netflix Reportedly Testing Software to Track Who Is Sharing Passwords

Netflix might finally be closing in on its users who share passwords.

U.K.-based software maker Synamedia, which looks for potentially fraudulent activity, unveiled a new service at 2019 CES (Consumer Electronics Show) that uses machine learning to spot shared passwords.

In order for the software to work, a streaming service like Netflix, Hulu or HBO Now buys access to Synamedia's platform, which analyzes data from all its users. The data includes a range of factors, like where an account is being accessed from, what time it's used, what content is being watched and by what device. Based off that, it looks for patterns that indicate a shared password, giving the service provider a probability score at how certain the system is that it's found a rule-bender.

"A typical pattern would be you have a subscriber that is simultaneously watching content on the East Coast and the West Coast of the US," Synamedia's chief product officer, Jean-Marc Racine, told The Verge. "That's unlikely to be the same person."

In fact, the company reported that nearly 26 percent of millennials share their Netflix credentials, which it says could add to billions of dollars in losses for streaming services if left unchecked.

Once Synamedia finishes its analysis, the fate of the user in question is in the service provider's hands. If the sharing pattern is extreme, which might mean that the credentials have been sold online to multiple users, the streaming service could simply shut down the accounts. But if it's something a bit more harmless, like sharing a password with family members, the platform may send an email suggesting the customer upgrade to a premium account.

"The approach is that people tend to be not too punitive about it," Racine said. "They up-sell services instead."

Racine says that Synamedia's machine learning approach, which notes always-evolving "consumption patterns," is more flexible than a hard-coded algorithm that has to be updated manually and often.

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Racine said that Synamedia's demand has increased ever since the video content market has started maturing. He said at the beginning, companies saw sharing passwords as an organic way to introduce growth, "but after a while, there is a growing concern about privacy, and [companies] want to ensure they're maximizing their revenue."

But if you're wondering which companies are testing out the new system, called Credentials Sharing Insight, you're out of luck. Synamedia won't reveal which companies are trialing its new software, although it confirmed that it is currently being trialed by a "number of firms," namely one that sells other services to some big industry names, like AT&T, Comcast, Disney, Verizon and Sky.