Disney’s Strategy to Combat Password-Sharing

Disney CEO Bob Iger has unveiled ambitious plans to tackle password-sharing on the company’s streaming platform, slated to roll out in June. In a recent CNBC interview, Iger emphasized the significance of streamlining the streaming industry, aiming to bolster subscriber growth and enhance profitability. He outlined aspirations for achieving double-digit margins for the business.

This strategic move echoes actions taken by streaming behemoth Netflix, which experienced a significant surge in subscribers after implementing measures to combat password-sharing. Netflix surpassed Wall Street’s expectations by adding nearly 22 million subscribers in the latter half of 2023.

Iger’s announcement follows a proxy battle against Disney’s activist investors, including Nelson Peltz, who had criticized Disney’s performance in the streaming-television sector. Reflecting on the proxy vote’s outcome, Iger expressed contentment with the resounding endorsement of the board’s strategies, particularly concerning CEO succession. Additionally, Iger hinted at ongoing plans regarding partnerships for ESPN.

The triumph in the proxy battle solidifies Iger’s position as Disney endeavours to rejuvenate its film and television franchises, achieve profitability in its streaming division, and forge partnerships for ESPN’s digital expansion.

Netflix’s crackdown on password sharing expanded to over 100 countries last year, extending beyond the United States. As part of its efforts to address market saturation and explore new revenue avenues, the platform implemented restrictions on password sharing and introduced a subscription option supported by ads.

Customers in 103 countries and territories, including key markets such as the United States, Britain, France, Germany, Australia, Singapore, Mexico, and Brazil, received emails in May 2023 reiterating Netflix’s policy that accounts should only be used within a single household.

To facilitate the transition, Netflix offers paying customers the option to add an extra member from outside their household for a supplementary monthly fee, amounting to $8 (₹660) in the United States. Members can also transfer a person’s profile to maintain their viewing history and personalized recommendations, ensuring a seamless experience.