Capital Investment Advisors

You’re Likely A Federal Criminal… Here’s Why

“Sir, please step away from the Roku and slowly raise your hands.  You are under arrest for the federal crime of sharing your Netflix password.”

Just kidding!  But sharing your password for Netflix or any other video streaming service is now technically a federal crime, thanks to a recent federal appeals court ruling.  In a case involving the theft of trade secrets, the Ninth Circuit Court of Appeals issued an opinion that said sharing passwords can be grounds for prosecution under the controversial Computer Fraud and Abuse Act, which was designed to stop hackers and cyber-thieves.

Related: Should Apple Buy Netflix?

In a dissenting opinion, Ninth Circuit judge Stephen Reinhardt noted that his colleagues had just made “consensual password sharing” a prosecutable offense, including the sharing of those for entertainment services.

But don’t sweat it.  The feds aren’t about to launch a massive dragnet to round up all you password gangsters.  One reason:  The streaming companies aren’t bothered by the practice – at least not publicly.  Both HBO and Netflix have said they see password-sharing as a great marketing tool as many freeloaders eventually sign up for their own accounts.

Related: Netflix Is About To Stream All Your Favorite Disney Movies

The companies say all those password buddies have no impact on business.  But that’s hard to believe given that one study concluded password-sharing costs the streaming industry $500 million in annual revenue, and another says 31% of Netflix users are mooching, with young twentysomethings among the worst offenders.

I think we all just need to apply common sense on this issue.  For example, it’s cool to share your login with your college kid, but he needs to get his own account when he starts working.  Cool to share with a serious boyfriend/girlfriend, not so cool to share with a casual work acquaintance.  The streaming companies are pretty lenient about account sharing.  We don’t want to stunt these amazing services by abusing that wiggle room.

Cover photo via Twin Design /

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