Disney is following in the footsteps of Netflix and will start cracking down on password sharing across its Disney+ streaming service, CEO Bob Iger has confirmed.
While speaking during an interview with CNBC’s “Squawk on the Street” on Thursday, Mr. Iger said the platform will be launching its “first real foray into password sharing” in June.
The rollout will initially begin in just a few countries before growing significantly, with a full rollout expected everywhere in September, he said.
Mr. Iger said the move is part of Disney’s efforts to turn streaming into a growth business through increased signups and revenue, noting the company is “eventually” looking at double-digit margins for the business.
It comes after Disney warned subscribers last year that it would start implementing restrictions on their ability to share account or login credentials outside of their households, although the company stopped short of providing exact details of how the anti-password sharing plan would work.
During a February 2024 earnings call, CFO Hugh Johnston also warned subscribers that a password-sharing crackdown was coming; stating that those “suspected of improper sharing” would be presented with an option to sign up for their own subscription.
Netflix ‘Gold Standard in Streaming’
However, it is widely expected that Disney will follow in the footsteps of rival platform Netflix, which began cracking down on password sharing last May, allowing users looking to share the streaming service to transfer the account to a new membership or pay $7.99 per month for an extra member outside their household.In January, the California-based streaming giant said those actions had helped it to add nearly 22 million subscribers in the second half of 2023, far surpassing Wall Street expectations.
“Netflix is the gold standard in streaming,” Mr. Iger told CNBC on Thursday. “They’ve done a phenomenal job and a lot of different directions. I actually have very, very high regard for what they’ve accomplished. If we can only accomplish what they’ve accomplished, that would be great.”
Currently, Disney+ and Disney’s other streaming services’ terms of service prevent customers from impersonating someone else by using their username or password, although those terms have not been strictly enforced via fines or other means.
Disney Scores Win in Proxy Battle
In March, Hulu, one of Disney’s other streaming services, updated its user agreement to add limitations on sharing accounts outside of households, warning current users that the new restrictions would begin that same month.Hulu’s revised terms of service now explain to users that “unless otherwise permitted by your Service Tier, you may not share your subscription outside of your household.”
Disney scored a defining victory after nominees were put forward by Trian Fund Management and Blackwells Capital at its annual shareholder meeting.
The Disney CEO said the proxy vote was a “decisive, true endorsement of the board,” he said, noting the company was taking the topic of CEO succession, which has been a significant concern among shareholders, “very seriously.”
Disney shares were up around 0.7 percent higher in morning trade after Mr. Iger’s comments regarding password sharing.
Overall, Disney shares are up about 30 percent so far this year.
