Disney Plus to Ban Password Sharing and Raise Subscription Fees

Disney Plus is set to crack down on password sharing outside of households starting this September, following in the footsteps of Netflix. This change was announced by Disney CEO Bob Iger during an earnings call, as reported by The Verge. The move signifies a significant shift in Disney's approach to account sharing, aiming to boost revenue and ensure fair usage of its streaming service.

Enforcing Password Sharing Restrictions

Previously, Disney had hinted at plans to restrict password sharing, but specifics were unclear. In February, the company revealed its intention to introduce paid sharing and began notifying users about upcoming changes. By June, Disney had already implemented paid sharing in select countries without specifying a timeline for the U.S. rollout. Now, Disney is committed to extending paid sharing rules to more subscribers by September, although the exact additional cost has not been disclosed.

Comparing with Netflix’s Strategy

Disney’s strategy closely mirrors that of Netflix, which introduced paid sharing last year, charging an extra $7.99 per month for adding another person to an account. Despite initial concerns, Netflix’s enforcement of password-sharing restrictions has been largely accepted by users. Bob Iger mentioned that Disney has not faced significant backlash from users regarding the notifications and measures taken thus far.

Upcoming Price Increases

In addition to the password-sharing crackdown, Disney is set to raise subscription prices for Disney Plus, Hulu, and ESPN Plus starting in October. Iger expressed confidence that the price hikes would not lead to a significant loss of subscribers. He highlighted that Disney plans to add more value through new content such as ABC News Live and curated playlists, which will help justify the higher prices.

Financial Gains and Strategic Moves

The decision to increase prices and enforce password-sharing restrictions comes as Disney Plus, Hulu, and ESPN Plus reported their first profitable quarter. Disney aims to maintain this profitability by enhancing revenue streams through paid sharing and higher subscription fees. By adopting a strategy similar to Netflix’s, Disney seeks to curb password sharing while ensuring the financial success of its streaming services.

Subscriber Preparations

As Disney rolls out these changes, subscribers should prepare for new rules and higher prices. These adjustments reflect Disney's broader strategy to boost its revenue and sustain the success of its streaming platforms. While there may be some initial resistance, the company is optimistic about the long-term benefits of these measures.

Disney Plus's forthcoming ban on password sharing and the planned subscription fee increases are part of a strategic effort to enhance revenue and maintain profitability. By implementing these changes, Disney aims to follow a successful model demonstrated by Netflix, ensuring fair compensation for its content and sustaining the financial health of its streaming services. Subscribers can expect added value through new content offerings, making the higher prices more palatable.