Disney will be cracking down on password sharing for its streaming services Disney Plus, Hulu, and ESPN Plus starting in June 2024 in select markets, eventually rolling out the new rules in September 2024. This move follows Netflix’s successful crackdown on password sharing, which resulted in a surge of 6 million new subscribers. Disney’s approach will allow users to add individuals outside their household for an additional fee instead of allowing them to “freeload.”
The decision to implement these stricter rules comes as streaming services face increasing competition in a crowded market and the need to attract new subscribers to offset the cost of expensive content. While there was initially skepticism about Netflix’s crackdown leading to mass cancellations, it proved to be a success for the company in terms of attracting new subscribers and retaining existing ones.
Co-CEO Greg Peters of Netflix stated that the strategy of cracking down on password sharing and account adding is working, as evidenced by increased engagement and retention rates among subscribers. This success has prompted other streaming services like Max to announce plans to implement similar restrictions in the near future, with Disney establishing a more concrete timeline for the rollout of these rules.
It remains to be seen how effective this strategy will be for Disney and other streaming services compared to Netflix, which saw a significant increase in sign-ups following the implementation of password sharing restrictions. While some may predict that users will abandon the services rather than paying additional fees, the success of Netflix suggests otherwise and points to a potential trend of converting shared account users into paying customers.
It is likely that all streaming services will eventually implement similar restrictions on password sharing to generate revenue and retain subscribers, even those that are currently allowing it to happen. Disney’s move signals a shift in the industry towards cracking down on password sharing and finding new ways to attract and retain subscribers in an increasingly competitive market.
Overall, the success of Netflix’s crackdown on password sharing has prompted Disney and potentially other streaming services to follow suit and implement similar restrictions. This strategy aims to convert shared account users into paying customers and increase engagement and retention rates among subscribers in a crowded streaming market. It remains to be seen how effective this approach will be for Disney and other services, but the trend towards cracking down on password sharing is clear in the industry.
