Yesterday was a big day for news if you’re a Disney fan. We learned that the previously planned Moana Disney+ series has been transformed into a Moana sequel movie. Taylor Swift’s Eras Tour concert movie will call Disney+ its streaming home. Disney has made a massive investment in Epic Games and will become part of Fortnite in a big way. Percy Jackson and the Olympians is getting a second season. All the cool news may have helped to bury some less-than-stellar information, that Disney plans to crack down on password sharing on Disney+ in a big way, starting later this year.
In an interview with CNBC prior to the Disney Q1 2024 earnings call, Bob Iger admitted that the company believes that recent cost-cutting initiatives, largely focused on the streaming sector, show that the business “can be profitable,” which, of course, is a business-friendly way of saying that right now streaming isn’t making any money. During the earnings call later, Disney CFO Hugh Johnston included managing password sharing as one of the key ways he believed streaming would find its way to profitability.
In a move similar to one Netflix has made, Disney+ will go after password sharing starting this summer. Accounts that are believed to be sharing their password outside their household will be given the option to add a secondary account that allows another household to use the account, for a fee, or the household sharing will be able to set up their own account. Iger said in the CNBC interview that they know the amount of sharing currently happening is “significant.”
This will, of course, be bad news for some people with a Disney+ subscription. A lot of people are likely sharing accounts with friends or family. It’s not exactly unknown that it is happening. There are a lot of streaming services out there and to get access to everything will cost a not insignificant amount of money, so some reduce costs by sharing passwords. That apparently won’t be an option much longer.
Disney+ actually lost a significant number of subscribers over the last quarter, largely attributable to the recent significant price increase. Having said that, the price increase, along with the recent addition of an ad-supported Disney+ tier, has increased the revenue per subscriber. While subscriber numbers are a key metric for Wall Street, simply making money is the ultimate goal, and Disney+ is headed in that direction.
And with all the big news items that came out yesterday, we could see an influx of new Disney subscribers. Any Taylor Swift fans who want to be able to view the Eras Tour Movie anytime they want will need to subscribe, so it seems likely a lot of Swifties who don’t already have Disney+ will be strongly considering it.
