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Disney will begin converting password ride-alongs into actual paid customers, following Netflix's lead, starting this summer, Variety reported.
Disney+ and Hulu have been notifying customer in the US of changes in the subscriber terms, this past week. The changes include the prohibition of users from sharing log-in details with individuals who do not live in their primary residence. Existing subscribers will see this rule take effect on March 14.
Disney follows Netflix's footsteps in ending password sharing
During Disney's Feb. 6 investor call, CFO Hugh Johnston said, “As it relates to the opportunity we see on paid sharing, beginning this summer Disney+ accounts suspected of improper sharing will be presented with new capabilities to allow their borrowers to start their own subscriptions.”
Johnston added that later in the year, Disney+ subscribers who want to give individuals who live outside their household access to streaming service, they can be added to their accounts for an additional fee.
He continued to say that the company is “still in the early days” of cracking down password sharing. Disney, he said, doesn't expect to see any “notable benefits” with the paid-sharing initiative until later in the year.
“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,” Johnston continued.
Disney and the late 2023 subscriber loss
In the last quarter of 2023, Disney, excluding Disney+ Hotstar, reported having lost a net 1.3 million subscribers in its core markets. The company attributed this loss to price hikes made during that quarter. However, for this current quarter's projection ending March, Disney estimated adding 5.5 million to 6 million subscribers to its core market.
The company hopes that it would be able to achieve the same results Netflix did when it enacted its paid-sharing initiatives. Netflix executives have touted the initiative for having boosted its subscriber numbers. The paid account-sharing step started last year in over 100 countries.
This announcement comes on the heels of Disney's planned sports channel consolidation with Warner Bros. and Fox.
Disney's updated Disney+ and Hulu subscriber agreements state, “Unless otherwise permitted by your Service Tier, you may not share your subscription outside of your household.” The company defines “household” as the devices “associated with your primary personal residence that are used by the individuals who reside therein.”
According to the updated terms, the company has the sole discretion to analyze the use of a subscriber's account in order to ensure the compliance to the agreement. If the company, again on their own discretion, determines that subscriber has violated the terms, Disney can limit or terminate access “and/or take any other steps as permitted by this Agreement.”
Now may be a good time to finally read those terms and conditions.
