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It's quite easy for people to watch OTT programming for free by sharing passwords. In fact, according to a recent report from Park Associates, 6 percent of U.S. households use an OTT provider that is paid for by a person who lives in a different home. That might not seem like a large amount, but it is quite detrimental to the OTT industry. Park Associates reported sharing passwords will cost the OTT sector $500 million in 2015.

Glenn Hower, research analyst at Parks Associates, said most people share credentials to save money, and this behavior will have a significant effect on digital video services in the near future.

"6 percent of U.S. households use an OTT provider that is paid by a person who lives in a different home."

"Credential-sharing has a measurable impact on video services, particularly in the OTT video service area, where young subscribers are active," Hower explained. "The impact on OTT video revenues is especially troublesome as OTT providers are investing large sums of money to boost their original content offerings."

Dish Network's OTT service, Sling TV, is especially feeling the effects of users sharing passwords. According to FierceCable, 25.5 percent of viewers are not paying anything to access the service's programming.

Pay-TV will also soon feel the burn of credential-sharing as they come out with their own OTT programming.

Live-streaming applications that are focused at sharing broadcast events, like the Mayweather-Pacquiao fight, will also be impacted by password sharing.

"Live-streaming usage has garnered media attention recently, but credential-sharing is also a popular form of piracy in the connected world, one that has received varying responses from service providers and content owners," Hower explained.