The House of Mouse’s New Strategy: Cracking Down on Password Sharing

Disney CEO Bob Iger announced during an earnings call on Wednesday that the company will be implementing a new crackdown on password-sharing starting in September. Although the details of this plan have not been disclosed, it is expected that Disney will be monitoring login activity outside of subscribers’ homes. Those suspected of sharing passwords may be prompted to pay a fee to continue doing so. This decision comes ahead of Disney’s plans to increase prices on its streaming services, including Disney+, Hulu, ESPN+, and their bundles, in October.

This move could mean higher bills for consumers and force them to make tough decisions. With an abundance of streaming services available, each raising prices or introducing new tiers, viewers are left with the dilemma of choosing which services to prioritize. Considering Disney’s extensive content library, which includes Marvel, Pixar, Star Wars, along with popular shows on Hulu and ESPN+, many subscribers may choose to pay the extra fees to continue enjoying the service and sharing passwords.

Sarah Henschel, a principal analyst at Omdia, stated, “The password-sharing crackdown has proven successful for other streamers in increasing revenue. However, it may lead to consumer frustration with streaming services.” This strategy has worked well for Netflix, as evidenced by a significant increase in subscribers after implementing a similar crackdown and introducing new tiers.

Wade Payson-Denney, an analyst at Parrot Analytics, noted, “The password crackdown for Netflix, combined with its ad-supported tier, has significantly boosted subscriber growth.” This success story may indicate a similar outcome for Disney in the future.

All Things Must Pass

Disney’s efforts to build its streaming subscriber base have been ongoing since the launch of Disney+ in 2019. Despite adding around 200,000 new subscribers in the last quarter, bringing the total to 153.8 million, Disney is still behind competitors like Netflix, which boasts over 270 million subscribers. However, the recent operating profit of $47 million from the combined streaming services marks a significant turnaround from losses in previous quarters.