Walt Disney’s opens a new tab popular Disney+ streaming service will start cracking down on password sharing from June in some regions and then more broadly by September, CEO Bob Iger said on Thursday. The entertainment conglomerate is looking to boost subscriber growth for its money-losing digital offerings as it shifts the bulk of its content away from its more profitable theatrical operations.
Iger told CNBC that the company’s upcoming password-sharing change is “a real priority” and will help drive direct-to-consumer business subscriptions. He added that the company also plans to raise prices for its ad-free Disney+ and Hulu plans next year, which aligns with Netflix’s recent rises.
Password sharing is using a single account across multiple devices to watch different titles. While Disney’s terms of service already prohibit password sharing, the company has enforced those rules systematically. In 2022, Netflix started requiring each account to be used by only one household. This led to the company attracting 5.9 million more subscribers in the U.S. in a month, the most significant gain in its history. Several other streamers, including Hulu, Disney+, and Warner Bros’ Max, have since moved to stop people from sharing their accounts with others outside their households.
Iger predicted that Disney+’s crackdown will likely have a similar impact. “We hope that it will encourage more people to sign up and also help us with our monetization, which is very important,” he said. “Our goal is to make Disney+ and all our other direct-to-consumer services profitable.”
Besides boosting the price of its ad-free plans, Disney will soon launch a one-app experience for its streaming services that will combine content from Disney+, Hulu, and ESPN+ into a single app. Iger said the move would save users time and make finding the films they want to watch easier.
While the move will help Disney bring its streaming services to profitability, it won’t happen overnight. The company’s ad-supported tier is still loss-making, and Iger said it might take until 2024 for the business to profit.
Iger also signaled a need for consolidation in the streaming industry, saying that Disney was “eventually” looking at double-digit margins for the business. The company has the advantage of its vast library and intellectual property, but competition is stiff. The Motley Fool has Netflix, Roku, and Walt Disney Co positions.
