The Disney+ website on a laptop computer in the Brooklyn borough of New York, US, on Monday, July 18, 2022.
Gabby Jones | Bloomberg | Getty Images
Disney
is entering the battle against password sharing in the streaming industry.
CEO Bob Iger announced during Wednesday’s earnings call that the company is actively investigating account sharing for streaming and will release more details about its policy to address this issue later this year.
“We already possess the technical capability to closely monitor this situation,” stated Iger on Wednesday. “While I cannot provide a specific figure, I can assure you that it is substantial.”
The company plans to implement strategies to mitigate password sharing in 2024. Although Iger expects Disney to experience some impact from these measures next year, the complete eradication of password sharing is not expected until a later time.
Disney’s decision follows in the footsteps of
Netflix
, which began implementing a new policy against account sharing earlier this year.
Iger emphasized the significance of this strategy for Disney.
Disney currently offers three streaming services: Disney+, Hulu, and ESPN+. These services are also available in a bundle at a discounted price. Although Disney has announced plans to integrate Hulu content into Disney+ for a unified user experience, standalone options will still be available.
Streaming platforms have also employed price increases to boost revenue.
As of Wednesday, Disney announced price hikes for almost all of its streaming services. The ad-free version of Disney+ will now cost $13.99 per month, marking a 27% increase. The price of ad-free Hulu is rising to $17.99 per month, a 20% hike. The prices for ad-supported options on Hulu and Disney+ will remain unchanged.
Iger has stated that advertising holds a crucial role in achieving profitability for the company.
While Disney eliminates password sharing, it remains uncertain how this action will impact subscriber growth, according to Iger.
“Naturally, we expect some effects, but we prefer not to speculate,” he explained, highlighting that this change presents an opportunity for business growth.
Netflix has been a pioneer in cracking down on password sharing among streaming services. This initiative was one of the strategies Netflix pursued after experiencing stagnant subscriber growth in 2022 and searching for ways to increase revenue. Similar to Disney+, Netflix introduced a cheaper, ad-supported subscription tier.
In July, Netflix reported an increase of 5.9 million customers during the second quarter, indicating the effectiveness of its password sharing crackdown in the U.S.
Prior to this, Netflix had estimated that over 100 million households, roughly 43% of its global user base, engaged in account sharing, impeding the company’s ability to invest in new content.
Netflix initially implemented its account sharing initiatives in international markets before notifying U.S. customers in May that they must cease sharing accounts.
Netflix offered several options to subscribers sharing accounts. They could transfer a profile to an individual outside of their household, allowing that person to start a new membership and pay independently. Alternatively, the main account holder could pay an additional $7.99 per month for each person outside of their household using their account.
The methods Disney will employ to reduce account sharing remain undisclosed.
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