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Following in the footsteps of Netflix and
Max, Disney+ is the latest streamer to crackdown on account sharing to boost
subscriber growth and keep the business viable.
The move is hardly a surprise
given the success which archrival Netflix has had since initiating its
crackdown a year ago. According to analytics firm Antenna, Netflix's
United States signups increased by 102 percent during the first four days after
its rule went into effect in May 2023, compared to the 60 days prior. There
were an average of 73,000 new signups daily, far outpacing cancelations.
From June, Disney will begin
converting suspected account sharers to paid subscribers across Disney+, having
already begun announcing the changes to Hulu and ESPN+ subscribers.
"Paid sharing is an
opportunity for us,” said Disney CFO Hugh Johnston during the recent Q3
earnings call. “It's one that our competitor is obviously taking advantage of,
and one that sits in front of us."
Say goodbye to your best
friend's neighbor's great aunt's Disney+ account, as Disney CEO Bob Iger said
in an interview with CNBC.
“We certainly have established
this as a real priority,” Iger said the earnings call. “We actually think that
there’s an opportunity here to help us grow our business.”
From the summer, Disney+
accounts suspected of improper sharing “will be presented with new capabilities
to allow their borrowers to start their own subscriptions,” explained Johnston.
This will include allow account holders to share to access to their
account with individuals outside their household for an additional fee.
“While we’re still in the early
days, and don’t expect notable benefits from these paid-sharing initiatives
until the back half of calendar 2024,” Johnston added. “We want to reach as
large an audience as possible with our outstanding content and we’re looking
forward to rolling out this new functionality to improve the overall customer
experience and grow our subscriber base.”
Netflix also has an option for
the account holder to pay to add a member outside the home or for the borrower
to transfer their profile and create their own account.
It saw Q4 revenue up
12 percent year-over-year, which it credited to paid sharing, as well as price
increases and the underlying business. Netflix said it is now the company’s
“normal course of business.”
“It’s integrated in everything
we do, and we’re iterating and improving on it just like we would any other
significant part of our product experience,” Co-CEO Greg Peters said
on the streamer’s Q4 earnings call. “We think of this essentially as
having built a more effective engine for translating the entertainment value
that we’re creating for our members into revenue. But I think it’s critical to
understand that that engine works on top of — and we see it working on top of —
very healthy organic growth.”
In March, Warner Bros.
Discovery, Max’s parent company, said it would bring in account sharing
restrictions by the end of this year with a broader rollout in 2025.
“We think, relative to the
scale of our business, it’s a meaningful opportunity,” JB Perrette, WBD’s CEO
and president of global streaming and games said.
Amazon and Apple have yet to
follow suit — “though neither streaming nor entertainment is the main
focus of these companies and they don’t need to use streaming to balance out
cord-cutting losses,” noted The Hollywood Reporter.
As Netflix did, Disney will
test the enforcement in smaller territories outside the U.S first. Iger hopes
the move will be one more turn of the screw to transform the service into a
more profitable venture.
Password-sharing crackdowns
also come at a time when piracy is on the rise—something that’s keenly impacted
WBD’s offerings. For years, HBO’s Game of Thrones was one
of the most pirated shows on TV. More recently, The Last of Us have taken
the top spots.
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