Disney is set to crack down on password sharing for its streaming services Disney Plus, Hulu, and ESPN Plus, following in the footsteps of Netflix. CEO Bob Iger announced that the process will begin in June 2024 in some markets, with a larger rollout in September 2024, potentially including the US. The new rules will allow users to add individuals outside their household for an additional fee instead of letting them “freeload.”
When Netflix implemented similar measures, there was skepticism that it would lead to cancellations rather than new sign-ups. However, after the crackdown on password sharing and account adding, Netflix added 6 million new subscribers, proving that the strategy was a success. Co-CEO Greg Peters noted that the new rules were working well, with higher engagement rates and retention characteristics among subscribers who complied.
HBO Max has also announced plans to implement restrictions on password sharing, with a timeline set for late 2024 or early 2025. It appears that Disney has a more concrete plan in place for the crackdown on sharing. While the success of these measures may not be as significant as Netflix’s due to differing content offerings, it is likely that most streaming services will eventually adopt similar policies to maximize subscription revenue.
Given the competitive nature of the streaming market, services are looking for ways to attract and retain subscribers. By cracking down on password sharing, Disney and other platforms aim to generate additional revenue by encouraging individuals to pay for their own accounts rather than sharing access. Despite initial skepticism, the success of Netflix’s crackdown serves as evidence that this strategy can be effective in generating new sign-ups.
As the crackdown on password sharing becomes more widespread across streaming services, it is expected that all platforms will eventually implement similar restrictions. While some services may try to maintain a “nice” image by allowing sharing for now, the shift towards encouraging individual subscriptions is likely inevitable. It remains to be seen if any platform can replicate the surge in sign-ups seen by Netflix, but the trend towards tighter restrictions on sharing is likely to continue in the competitive streaming landscape.
