The US company Disney is taking action against password sharing on its streaming service – and wants to ban it completely over the course of the year. The provider is following the example of its competitor Netflix.
Many people use shared accounts for streaming providers, even if they don’t live together: After Disney announced a tougher approach against this practice on its platform last year, the company has now announced a concrete schedule. Disney boss Bob Iger said on CNBC that they would initially only take action in a few countries in June. The sharing of passwords beyond one household should finally be prevented across the board in September.
More subscribers or churn?
Disney currently allows accounts to be shared free of charge, but in the future, users outside of the same household will have to pay for their own subscription to Disney+. Market leader Netflix has been cracking down on the sharing of passwords for months – and has gained more subscribers as a result. Thanks to the efforts, the number of new customers quadrupled in one quarter, Netflix announced in October.
At the same time, taking action against “password free riders” also entails risks: disgruntled users could switch to the competition. Disney hopes that the attractiveness of its streaming offering with films and series about “Star Wars” and the Marvel superheroes will prevent this. At the same time, the streaming services offer cheaper subscriptions with advertisements.
Disney wants to bring its streaming business into the black by the end of September. The company has recently reduced its losses significantly. But in the last quarter, the division still posted an operating loss of $216 million with the Disney+ service and the ESPN+ sports offering. And the number of subscribers to the core Disney+ offering also fell by one percent to 111.3 million.
Iger strengthens position general meeting
Iger also wants to improve the recommendations at Disney+ in order to present users with films and series that are interesting to them more prominently. In some countries, more emphasis should be placed on local productions, he said in the CNBC interview. The 73-year-old was actually already retired, but returned to the top management at Disney in November 2022 to replace his hapless successor Bob Chapek. His current contract runs until the end of 2026.
Iger recently strengthened his position at the entertainment giant by winning against a billionaire investor. At last Wednesday’s annual general meeting, Disney shareholders rejected financial investor Nelson Peltz’s attempt to gain more influence over Disney’s strategy. Neither Peltz nor any other candidate he nominated were elected to the company’s board of directors, Disney announced.
Iger is now faced with the challenge of aligning the company with a profitable streaming business while revenues in the American cable TV market are falling and cinema revenues have also recently weakened. He also wants to invest $60 billion in Disney’s theme parks and cruise ships in the coming years, which have become a central source of money for the company.