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Netflix reveals how they plan to track password sharing
Netflix plans to start charging people for sharing their passwords with others.
Disney CEO Bob Iger shared some new details about the password sharing crackdown that will impact Disney+ users in the coming months.
The company has been planning a password sharing crackdown for months, and the latest developments came during Disney's quarterly earnings call on Monday.
To sum it up, Disney is "just getting started."
Password sharing will begin in June in "very select markets," with a worldwide roll-out in September, Iger said.
"We feel quite bullish about it," he added, adding that it's a "necessary and very, very productive step" for the company.
(Photo Illustration by Thiago Prudencio/SOPA Images/LightRocket via Getty Images)
Iger praised Netflix for how it handled its own password sharing crackdown, which began last year in households across the U.S., and said the streaming platform is the "gold standard."
"Obviously, we're heartened by the results that Netflix has delivered in their password sharing initiative and believe that it will be one of the contributors to growth, as Hugh [Johnston, senior executive vice president and chief financial officer] noted, going forward," Iger said. "I think it's also important to note, Netflix is in many respects a gold standard when it comes to streaming."
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Curbing password sharing is something that has come up in previous quarterly earnings calls, dating back to 2023. And it should be noted that Disney+ subscribers in other countries, like Canada, were notified that the streaming platform will begin to restrict their "ability to share your account or login credentials outside of your household" in September 2023.
That's something that's already written in both Disney+, ESPN+ and Hulu's subscriber agreements.
"Unless otherwise permitted by your Service Tier, you may not share your subscription outside of your household," the subscriber agreements say in part, adding that anyone found in violation can be limited or terminated from using the platform.
Hulu users were notified via email about the amended subscriber agreement on Feb. 1. A similar message was sent to Disney+ subscribers in late 2023. The subscriber agreements were last updated on Jan. 25, but it remains unclear when the password sharing language was added for Disney+ and ESPN+.
In August 2023, Iger said Disney already had the technical capabilities to monitor who is sharing passwords, and the number of people doing so was "significant." They said they would "get at this issue" in 2024.
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Fast-forward to February of this year, Iger said the accounts that are suspended as a result of password sharing will be given "new capabilities" to let their friends and family start their own subscriptions. For example, people accessing a Disney+ account from outside the main household can be added to said account for an additional fee.
"While we are still in the early days and don’t expect notable benefits from these paid sharing initiatives until the back half of calendar 2024, 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," Iger said.
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At the time, Iger said the company didn't know how eliminating password sharers would convert to growth in subscriptions. Now, Iger said they're hoping the current lineup of movies, shows and other entertainment offerings will keep those subscriptions coming in.
For example, Iger mentioned several new movies coming to its streaming platforms after their theatrical releases, including Inside Out 2, Marvel's Deadpool and Wolverine, Moana 2 and Mufasa: The Lion King, to name a few.
Disney+ is also flirting with the idea of more sports content on the streaming platform, adding the ESPN tile to Disney+ ahead of its enhanced stand-alone ESPN streaming service in fall 2025, and long-term deals with sports organizations like the NCAA, NFL and a potential contract with the NBA.
"If you look at programming, we stack up really well. We have a great lineup and quality of programming across not just ESPN and Disney+, but also Hulu. What we're building is the technology that Netflix has had in place and has been building for well over a decade to improve the business from a bottom-line perspective. And that starts with password sharing>"
FOX Business and FOX TV Digital contributed to this report.