Disney to Crack Down on Streaming Account Sharing, Taking Inspiration from Netflix
Disney is set to follow in Netflix’s footsteps by implementing measures to restrict the sharing of streaming service accounts. The move comes as Disney seeks to drive monetization and address the issue of significant password sharing on its platforms, according to CEO Bob Iger. Starting later this year, Disney intends to update its subscriber agreements to include additional terms on sharing before implementing tactics in 2024 to curb account sharing and drive business growth.
Netflix had previously introduced a policy in May that emphasized accounts should only be shared by individuals living in the same household. This move was aimed at reducing the number of households engaging in password sharing, which Netflix estimated to be around 100 million. Following the policy update, Netflix counted approximately 238.39 million paid memberships globally, with an increase of 5.89 million during the quarter.
While Disney has yet to provide specific figures on account sharing, Iger acknowledged the issue was significant. The company believes that by eliminating password sharing, it has the potential to convert that disruption into growth and attract more paying subscribers. Iger emphasized that addressing account sharing is a priority for Disney and presents an opportunity to expand their business.
Disney’s direct-to-consumer segment, encompassing streaming services such as Disney+, Hulu, and ESPN+, generated $5.5 billion in revenue for the third quarter, marking a 9% YoY increase. The combined paid subscribers for all three services reached 219.6 million. However, Disney+ experienced a slight decline in subscribers, totaling 146.1 million for the third quarter. Hulu’s paid subscribers increased slightly to 48.3 million, while ESPN+ declined marginally to 25.2 million.
With regards to the direct-to-consumer business, Iger aims to achieve profitability by the end of fiscal year 2024. Disney reported a net loss of $460 million from continuing operations, compared to a profit of $1.4 billion during the same period the previous year.
The decision to restrict account sharing demonstrates Disney’s commitment to optimizing its streaming services and generating revenue. By following the lead of Netflix and adopting measures that prevent password sharing, Disney hopes to strike a balance between reducing unauthorized account usage and attracting new paying subscribers. As the streaming industry continues to evolve, it remains to be seen how these efforts will impact Disney’s bottom line and future growth in the highly competitive market.
