Last year, Netflix began its fight against password sharing globally. It started restricting users from sharing passwords with their friends or anyone outside their household. The move followed the company’s effort to boost revenue and increase user sign-ups. Now, following Netflix’s footsteps, Disney Plus is planning to start its own password-sharing crackdown in the coming months.
In a company earnings call on Wednesday, Disney chief financial officer Hugh Johnston said Disney Plus accounts “suspected of improper sharing” or anyone who will sign up from someone else’s account will see an option to sign up for their own subscription. He said that the company will start restricting users from sharing passwords starting in summer 2024 from March.
While Disney plans to restrict users from practising on other’s accounts it will also introduce a new feature which will allow account holders to pay an extra fee to add people who live in different households. Similar to how Netflix allows users to pay a little extra to allow account signup outside the household. Though not available in all the regions, Netflix currently charges $7.99 per month for adding someone who lives outside the household.
Although Disney has now yet disclosed the amount of the fee. “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.”
Notably, Disney Plus changed its terms and services this year to prohibit users from sharing their subscriptions with people who do not live with them. The new terms affect new subscribers from January 25 and will apply to existing subscribers on March 14.
“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.”
One of the main reasons why streaming services like Netflix and Disney have started restricting password sharing is that it is affecting their revenue significantly. These companies, like other tech giants, are struggling with profits and password sharing is one of the major causes. Password sharing leads to fewer paying subscribers, which impacts their income. By converting password sharers into paying customers, they are aiming to increase their revenue substantially. Netflix reported adding 9 million new subscribers after enforcing the crackdown.
Besides password sharing, streaming services are also introducing new ad-focused plans to generate ad revenue. Netflix has already launched a new ad plan that offers users a Netflix subscription at a lower price but with ads. The company has also reportedly started removing its Basic plan so that users have the option to get the base plan at a higher price. Similarly, Amazon Prime has also recently introduced an ad plan to boost its revenue.