Yahoo Finance Disney Plus follows Netflix with password sharing crack down
Disney’s streaming service is poised to follow in Netflix’s footsteps and clamp down on password sharing this summer, aiming to beef up its subscriber base and revenue.
Disney boss Bob Iger said the company plans on “launching our first real foray into password sharing” in June, in an interview on CNBC on Thursday. The rollout will start in “just a few countries in a few markets” before expanding to all subscribers in September, Iger said.
Last May, rival streamer Netflix came down hard on password sharing and began charging users an extra $7.99 per month to add an extra viewer outside their household.
The strategy paid off, with Netflix gaining nearly six million subscribers in the following quarter after the crackdown and nearly 22 million subscribers in the second half of 2023. The firm had become aware that more than 100 million households were watching its shows on an account shared with other households.
Disney Plus, which owns the Star Wars franchise, already has anti-password sharing rules which went into effect for new subscribers on 25 January and were rolled out to existing members on 14 March.
But, from summer, subscribers will also be able to add members outside their household for an additional fee, though Disney has not revealed the exact amount yet.
Currently, its streaming business, which features Disney classics like Frozen and the Marvel franchise movies, is seeking to reverse heavy losses and dwindling subscribers. Last year, it hiked subscription prices and launched a new ad-supported tier in the UK and other European countries starting 1 November at £4.99.
Iger is now trying to copy Netflix’s strategy in the hopes of similar results. He said: “Netflix is the gold standard in streaming. They’ve done a phenomenal job and a lot of different directions. I actually have very, very high regard for what they’ve accomplished. If we can only accomplish what they’ve accomplished, that would be great.”
Guy Meyers, regional director of customer success at subscription management firm Recurly, said Disney Plus is likely to see the same success as Netflix so long as subscribers still believe the service is worth paying for. “Disney benefits from its enormous catalogue of well-known and popular content,” Meyers said.
Data from Recurly’s 2024 State of Subscriptions report found that subscriptions to digital media and entertainment services have gone up by 124 per cent since 2020.
But new YouGov research has suggested the tide could be turning. It found that consumers are overwhelmed by the large amount of on demand services to choose from and are concerned over the cost of streaming.
“Disney gets tough. The soft, smiling, family centred company has just replaced Mickey Mouse’s white gloves with an iron fist,” said Adrian Stalham, chief change officer at London consultancy Sullivan and Stanley.
According to him, the technology to track this password sharing is fairly simple. “But creating an enforcement layer to exploit it has taken time – and no doubt butted up against Disney’s feel-good mission,” he said.
Iger also got tough on activist investor Nelson Peltz this week, as shareholders voted to elect all 12 nominees recommended by the Disney board, instead of those put forward by Peltz’s Trian Fund Management.
The billionaire, who has a roughly $3.5bn (£2.8bn) stake in Disney, had spent months demanding changes at the company and was pushing for multiple board seats.
