Tech companies are cracking down on account sharing, forcing users to pay for services they were once able to access for free through loopholes. Retailers like Costco and streaming services like Disney+ are now implementing verification technology to prevent account sharing. This includes tracking IP addresses and using facial recognition technology to ensure users have legitimate access to their accounts. This shift is part of a larger trend of companies enforcing subscription policies to increase revenue and prevent lost profits from sharing.
Netflix, for example, experienced a similar crackdown on account sharing after losing subscribers for the first time in its history in 2022. The rise of competition from other streaming services like Disney, Apple, HBO, and Amazon, as well as the return to social activities outside of the home, contributed to Netflix’s decline in subscribers. In response, Netflix focused on brand loyalty and successfully added millions of new subscribers by offering unique content and making its service essential to viewers. This strategy may not be as effective for other companies like Disney and Costco, who are still establishing their brand loyalty and customer base.
Disney’s streaming business, which includes Disney+, Hulu, and ESPN+, only recently became profitable and may not have the same level of must-watch-ability as Netflix. Despite its beloved brand and popular content, Disney is still working to solidify its place in the competitive streaming market. Costco, on the other hand, relies heavily on membership fees for its profit margins and offers low prices to customers. By increasing its membership fee and offering perks like discounted codes, Costco is betting on the loyalty and routine of its customers to sustain its business model.
Costco’s membership fees make up a significant portion of its revenue and profit, allowing the company to keep prices low and maintain a high level of customer satisfaction. The increase in membership fees, the first in several years, is intended to help Costco cover costs and maintain its business model. Despite the shift towards stricter account verification in the tech industry, companies like Costco continue to offer value to customers through perks and low prices. In a world where access to services is becoming more regulated, companies like Costco and Disney are navigating the balance between profitability and customer satisfaction.
