In a move mirroring its competitor Netflix, Disney is gearing up for a worldwide crackdown on password-sharing across its streaming platforms. Disney CEO Bob Iger unveiled plans for this initiative in an interview with CNBC, signaling the company’s intention to enforce stricter measures to curb unauthorized access to services like Disney+, Hulu, and ESPN+.
The crackdown will commence with trials in select countries and markets over the upcoming months, with a full-scale rollout scheduled for September. Although Disney has not disclosed the specific countries targeted initially, the enforcement aims to prevent subscribers from sharing their login credentials with individuals outside their households, thereby accessing the streaming services for free.
Earlier this year, Disney implemented a rule prohibiting new subscribers from sharing passwords, extending this policy to existing members from March 14. This strategic move comes in the wake of Netflix’s successful crackdown on password sharing last year, which reportedly contributed to a significant surge in subscribers for the streaming giant.
Acknowledging Netflix’s dominance in the streaming realm, Iger emphasized the need for Disney to emulate its competitor’s success. Under the proposed crackdown, users found sharing passwords outside their households will receive warning emails. They will then be given the option to pay an additional fee to continue sharing their account or to prompt the additional user to subscribe separately—a tactic akin to Netflix’s approach.
In Australia, Netflix implemented a similar crackdown in May, requiring users to designate a primary location and verifying IP addresses to ensure compliance. Subscribers were offered the choice to pay an extra fee or transition the additional user to a separate membership, coinciding with the introduction of a new, more affordable subscription tier featuring advertisements.
While Disney has not disclosed the pricing for adding new users or any potential subscription tier adjustments, it aims to capitalize on the password-sharing crackdown to drive growth in its streaming business. The company aims for “double-digit margins” in the long term and targets profitability for its streaming division by the end of the 2024 US fiscal year.
The streaming business unit, despite incurring losses in previous years, has shown promising signs of improvement, with Disney reporting a narrower loss of $US138 million in the fiscal year ending 2023 quarter compared to nearly $US1 billion the previous year. Disney’s strategic move to crack down on password sharing reflects its commitment to enhancing revenue streams and solidifying its position in the competitive streaming landscape. As the crackdown unfolds, subscribers can anticipate a shift towards stricter enforcement measures across Disney’s streaming platforms, reshaping the dynamics of access and subscription management in the digital entertainment sphere.
