Tech

Disney+ password-sharing crackdown coming in September


The House of Mouse is being renovated. During an earnings call on Wednesday, Disney CEO Bob Iger told investors the company will begin a new crackdown on password sharing “willing” starting in September. Iger did not reveal how the company plans to limit password sharing, but maybe this means The company will track subscribers’ logins outside their homes and prompt those suspected of sharing their accounts to pay a fee to do so. The announcement comes months before the company plans to raise monthly prices on Disney+, Hulu, and ESPN+—and their respective packages—in October.

That means higher bills and tougher decisions for most people. As more streaming services join the fray—and as many of them raise prices and/or introduce ad-supported tiers—those who like to watch everything increasingly have to find two or three services they’re willing to pay $10 to $20 a month for. Considering Disney has a pretty strong movie catalog (Marvel, Pixar, Star Wars), as well as Hulu shows like Bear and with so many sports on ESPN+, chances are many subscribers will pay to keep the service—and pay even more to share their passwords.

“The password-sharing crackdown has been positive for other streamers,” said Sarah Henschel, a principal analyst at Omdia who closely tracks the streaming market. “It’s an effective strategy to increase revenue. However, it’s caused a lot of consumer frustration with streaming.” In other words, subscribers may continue to share their accounts and even pay extra, but that means they don’t end up keeping all the services.

And damn, it worked for Netflix. Late last year, after a few shaky quarters and amid the streaming giant’s rollout of both its ad-supported plan and its paid share program, Netflix added 9 million new subscribers worldwide. It hasn’t really seen any major drop in subscribers since then. So far, this is the only test case—Max seems ready to launch a crackdown later this year or early next year, and Others have not yet tested—but it shows that paying to share a streaming account doesn’t always drive people away. Or at least not yet.

“Netflix’s password tightening—combined with the company’s advertising tier—has been a huge boon to subscriber growth,” says Wade Payson-Denney, an analyst at streaming industry tracker Parrot Analytics. In the year before the streaming company began tightening, Netflix’s global subscriber base grew by 11.8 million; in the four quarters that followed, it grew by 39.3 million, according to Parrot. That could lead to similar growth for Disney.

This too shall pass.

This isn’t the first time Disney has warned of such a crackdown. Last year, Iger refer that the company is looking to curb this practice; in February, the company said it planned to start a paid sharing program, but then only rolled it out in some marketsin June.

Disney has been working hard to build its subscriber base and profit transfer from streaming since the launch of Disney+ in 2019. Over the past three months, Disney+ has only generated about 200,000 new subscriberstotaling 153.8 million—a small number compared to the more than 270 million subscribers Netflix claims, but not bad, and a significant number increase over last yearMeanwhile, Max is still searching. break 100 million.

As part of its earnings announcement on Wednesday, Disney Reveals The company’s combined streaming services made money for the first time last quarter, posting an operating profit of $47 million. That’s a huge increase; Disney’s streaming operations lost $512 million in the third quarter of last year. The recent gains were largely due to ESPN+.

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