Disney Plus Enforces Password Sharing Rules, Offers Extra Subscription

Disney Plus has announced plans to implement measures against password sharing, mirroring a similar move by Netflix last year. This initiative comes as part of Disney's effort to enhance revenue streams and increase user engagement.

Last year, Netflix initiated its campaign against password sharing on a global scale, prohibiting users from sharing credentials with individuals outside their households. In line with this strategy, Disney Plus now aims to commence its crackdown on password sharing in the upcoming months, following in Netflix's footsteps.

During a recent company earnings call, Disney's chief financial officer, Hugh Johnston, disclosed that Disney Plus will identify accounts suspected of improper sharing, prompting users to sign up for their own subscriptions. This measure is set to be implemented starting March 2024.

While Disney intends to curtail unauthorized account access, it will also introduce a new feature enabling account holders to pay an additional fee to include individuals residing in separate households. This model is reminiscent of Netflix's practice, where users can pay a premium to extend account access beyond their immediate household.

However, Disney has not yet disclosed specific details regarding the fee structure. "Our content is outstanding and we want as many people as possible to enjoy it," Johnston said. "We are excited to launch this new feature and increase our subscriber base."

Significantly, Disney Plus has revised its terms of service, effective January 25 for new subscribers and March 14 for existing subscribers, to prohibit password sharing with non-household members explicitly.

"Paid sharing is an opportunity for us," Johnston further added. "It's one that our competitor is obviously taking advantage of, and one that sits in front of us ... We've got some very specific actions that we're taking in the next couple of months."

The motivation behind these measures stems from the adverse impact of password sharing on streaming service revenues. Companies like Netflix and Disney are addressing this issue to mitigate losses and bolster their financial performance. By converting unauthorized users into paying subscribers, they anticipate a significant revenue increase. Notably, Netflix reported a surge of 9 million new subscribers following the implementation of its password-sharing restrictions.

In addition to combating password sharing, streaming platforms are exploring alternative revenue streams, including ad-focused subscription plans. Netflix has introduced a new ad-supported plan at a reduced price point while also phasing out its Basic plan to offer a higher-priced entry-level option. Similarly, Amazon Prime has recently launched an ad-supported subscription tier to enhance revenue generation.