Disney’s House of Mouse is getting a makeover. During an earnings call on Wednesday, Disney CEO Bob Iger told investors that the company is launching a new crackdown on password sharing.authentic” will begin in September. Iger didn’t say how the company plans to limit password sharing, but this likely means monitoring subscribers’ logins away from home and forcing anyone suspected of account sharing to pay a fee. The announcement comes months before the company plans to raise monthly prices for Disney+, Hulu, ESPN+ and their respective bundles in October.
For most people, this means higher bills and tough decisions. As more streaming services enter the market, many of which also raise prices or introduce ad-supported plans, people who love watching movies will have to decide which two or three services they’re willing to shell out $10 to $20 a month for. Disney has a pretty strong back catalog, including Marvel, Pixar, and Star Wars, while Hulu also has shows like: bear ESPN+ has so much sports programming that many subscribers will likely pay to keep the service and even more to share their passwords.
“The crackdown on password sharing is working to the advantage of other streamers,” says Sarah Henschel, principal analyst at Omdia, who closely monitors the streaming market. “It’s an effective strategy to increase revenue, but it’s also fueling a lot of consumer dissatisfaction with streaming.” In other words, while subscribers will likely stick around and may even pay extra to share accounts, it may ultimately mean they don’t keep the service altogether.
And it worked for Netflix. After a few shaky quarters late last year, as the streaming giant rolled out both its ad-supported plans and paid sharing programs, Netflix gained 9 million new subscribers worldwide. It hasn’t seen a significant drop in subscriber numbers since then. For now, that’s the only test case. Max seems poised to start cracking down later this year or early next year. Other countries have not yet tested— but it does show that paying to share a streaming account doesn’t necessarily mean people are going to run away with it. At least, not yet.
“Netflix’s password crackdown, coupled with its advertising layer, has been a big contributor to its subscriber growth,” said Wade Payson Denney, an analyst at streaming industry research firm Parrot Analytics. Netflix added 11.8 million subscribers worldwide in the year before the crackdown and 39.3 million in the four quarters that followed, according to Parrot. Disney could see similar growth.
All Things Must Pass
This isn’t the first time Disney has warned of such a crackdown: Last year, Iger suggested the company was considering limiting the practice. In February, the company announced it was planning to launch a paid sharing program, only to launch it just a month later. Some marketsin June.
Disney has been struggling to grow subscriber numbers and turn a profit from streaming since it launched Disney+ in 2019. Over the past three months, Disney+ has made about $1.2 billion in profits. 200,000 new subscribersfor a total of 153.8 million. That’s a drop in the bucket compared to the 270 million-plus subscribers that Netflix claims, but it’s not bad and it’s up substantially from last year. Exceeded 100 million.
As part of its earnings release on Wednesday, Disney Reveals The company’s overall streaming services turned a profit for the first time last quarter, bringing in $47 million in operating income — a sharp turnaround. Disney’s streaming business lost $512 million in the third quarter of last year, with recent gains coming mostly from ESPN+.
