Disney+ is gearing up to tighten the reins on password sharing, taking a cue from Netflix’s playbook. Starting this summer, Disney plans to crack down on users who are suspected of sharing their login credentials improperly, aiming to convert freeloaders into paying subscribers.
Recent notifications sent out to U.S. customers of Disney+ and Hulu outline changes to subscriber terms, explicitly prohibiting the sharing of login details with individuals outside of one’s primary residence. These changes come into effect for existing subscribers on March 14.
During a call with investors, Disney CFO Hugh Johnston emphasized the company’s strategy to address password sharing. He revealed that Disney+ accounts flagged for improper sharing will soon face new measures, allowing those borrowing the account to start their own subscriptions. Additionally, later in 2024, Disney+ users will have the option to add individuals outside their household to their accounts for an extra fee.
Johnston acknowledged that it’s still early days for the password crackdown and anticipates significant benefits from these initiatives by the latter half of 2024. He underscored Disney’s commitment to reaching a broad audience with its content and expressed optimism about enhancing the customer experience and expanding the subscriber base through these measures.
Despite facing a net loss of 1.3 million subscribers in its core markets during the last quarter of 2023, Disney+ is optimistic about its growth trajectory. The company attributes this contraction to recent price hikes. For the current quarter ending in March, Disney projects adding between 5.5 million and 6 million subscribers to its core service.
Disney is looking to emulate Netflix’s success in curbing password sharing. Netflix executives have credited their account-sharing initiative, launched last year in over 100 countries, with driving subscriber growth.
The updated subscriber agreements for Disney+ and Hulu explicitly state that sharing subscriptions outside of one’s household is not permitted unless otherwise allowed by the service tier. A “household” is defined as the collection of devices associated with an individual’s primary residence and used by its residents.
Moreover, the agreements grant Disney the discretion to analyze account usage to ensure compliance. If a violation is detected, Disney reserves the right to limit or terminate access to the service, among other actions outlined in the agreement.
In summary, Disney is taking steps to combat password sharing, aiming to convert freeloaders into paying customers. With new measures set to roll out, including the option to add users outside the household for an additional fee, Disney is optimistic about strengthening its subscriber base and enhancing the overall customer experience.