Bob Iger Announces Crackdown on Password Sharing for Disney+ Will Begin in June

Disney CEO Bob Iger has announced that the Walt Disney Company’s streaming service, Disney+, will start cracking down on password sharing.

In an interview with CNBC, Iger announced that Disney is “launching [its] first real foray into password sharing” sometime this June.

In the newly updated subscriber agreements for Hulu, users “may not share [their] subscription outside of [their] household.” This definition of a ‘household’ encapsulates the collection of devices associated with users’ primary residence, exclusively used by those residing within.

Like Netflix, Disney’s new password rules will allow you to add individuals outside your household for an additional fee. The “freeloader” fee has not been announced as of writing.

When Netflix announced its plans to crack down on password sharing, there was a fair amount of skepticism, especially since the company seemed to support password sharing for years.

According to Forbes, Netflix announced that it had gained 9 million new subscribers several months after ending password sharing in the U.S. “We’ve now successfully taken action in every region in which we operate and we’re rolling it out as planned,” Netflix said.

While not everyone can afford the more expensive, ad-free Netflix plan, Netflix offers a cheaper, ad-supported tier that allows viewers to indulge in all of their favorite shows.

“Going forward, we’ll continue to refine and optimize our approach to convert additional borrower households into either full-paying members or extra members over the next several quarters,” the streaming giant said.

While the streaming bubble has popped for many, streaming giants like Netflix and Disney are doing what they can to be profitable forms of at-home entertainment.

While Disney+ is one of the best streaming services available (thanks to Hulu’s content being available on the family-friendly service and the company’s most popular brands like Marvel, “Star Wars,” and Pixar), not everyone can afford the service.

While these changes to our favorite streaming services are not ideal, streaming is a business with a lot of ups and downs. Earlier this year, Disney followed Warner Bros. Discovery CEO David Zaslav’s steps by removing original movies and series.

Disney+’s new password rules will change how multi-generational families watch content. Grandparents, parents, and children often share accounts, but now they’ll need separate subscriptions.

Families might need to adjust their viewing patterns due to the crackdown. Scheduling specific times for individual watching or investing in additional subscriptions are potential solutions.

Disney+’s method of monitoring household accounts raises significant privacy concerns. Users may feel uncomfortable with the extent of data collection required to enforce the new rules.

The new password policies might face legal challenges in certain jurisdictions. Consumer rights groups could argue that these policies unfairly restrict account usage and violate consumer protection laws.

Disney+ expects a revenue boost from the password crackdown, similar to Netflix’s experience. By converting freeloaders into paying subscribers, Disney+ aims to increase its subscriber base and revenue.

That said, despite anticipated revenue gains, there’s a risk of losing subscribers unhappy with the new rules. Some users might cancel their subscriptions out of frustration, leading to a temporary dip in numbers.

Users are finding creative ways to adapt to Disney+’s password-sharing ban. Subscription-sharing services such as Netflix, where users split costs with strangers, are nothing new.

Many users are taking a more proactive approach to managing their accounts. They are setting clear boundaries within their households to ensure compliance with the new rules.

Disney+’s password-sharing crackdown sets a precedent for the streaming industry. Other platforms may follow suit, implementing similar measures to curb account sharing.

Competitors like Amazon Prime Video and HBO Max might adjust their strategies in response to Disney+’s and Netflix’s moves. They could enhance their offerings, introduce more flexible sharing options, or implement their own crackdowns.

To retain subscribers amidst the password policy changes, Disney+ is likely to enhance its content offerings — at least, it should.

Disney+ could introduce customer loyalty programs to mitigate subscriber loss. Offering discounts, special perks, and early access to new content can help retain users.