Disney (DIS) is embarking down a dangerous road that has sparked controversy for other companies who chose the same path. In January, Disney warned its customers in an email that it will be cracking down on password sharing on its streaming platforms; Disney+, Hulu and ESPN. But in a new interview with CNBC, Disney CEO Bob Iger revealed that the change is coming sooner than what may have been expected.
“In June, we'll be launching our first real foray into password-sharing,” said Iger in the interview. “Just a few countries and a few markets, but then it will grow significantly with a full rollout in September.”
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Iger in the interview also claims that the change is part of Disney’s effort to grow its business after it found that its platform Disney+ was falling behind Netflix (NFLX) when it came to subscribers shortly after it launched in 2019.
“In a very, very short period of time, we find ourselves second to Netflix in terms of global subscribers for a pure streaming business,” said Iger. “We know that we ended up losing a lot of money on that, more so than we expected initially. Part of that was because we were chasing sub growth and not as focused as we needed to be on the bottom line.”
Iger also said that Disney is focused on growing its margins to levels that its “shareholders will feel good about.” He also stated during the interview that Netflix is “the gold standard in streaming.”
“They’ve done a phenomenal job in a lot of different directions,” said Iger. “I actually have very, very high regard for what they’ve accomplished. If we can only accomplish what they have accomplished, that would be great.”
Netflix was the first streaming company to implement a password sharing crackdown on its platform. In May last year, Netflix began offering users enrolled in its Standard and Premium plans the option to add extra members to their accounts for an additional $7.99 a month on top of their usual monthly subscription fee.
Many users were unhappy with the change and even vowed to cancel their Netflix subscriptions. #CancelNetflix was even trending on social media platform X. The move ended up being beneficial for Netflix as it ended up increasing its subscriber count.
Max, the streaming service that has HBO, Discovery, and Warner Bros., is also reportedly planning to follow in Netflix's footsteps.
In January, Disney updated the subscriber agreements for its streaming platforms. The company now warns users in the agreements that it may verify certain account information in order to confirm users aren’t sharing login credentials.
“You agree not to impersonate or misrepresent your affiliation with any person or entity, including using another person’s username, password or other account information, or another person’s name or likeness, or provide false details for a parent or guardian,” read the Hulu agreement. “You agree that we may take steps to verify the accuracy of information you provide.”
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