Disney+ will begin to block password-sharing between friends and family from tomorrow in the UK. Starting on June 1, Disney+ will stop account holders from sharing their login details with people outside of their household in a bid to drive up the number of paid subscribers and bolster revenues from streaming.
Netflix pioneered this approach, adding 8.8 million new paid subcribers to its streaming service in just three months after it clamped down on password-sharing. Most recently, the streamer confirmed that profits in the first quarter of 2024 had jumped to more than $2.3bn (£1.85bn), increasing total subscribers to 270 million.
After years of telling subscribers there was no issue with sharing login credentials with friends and family to save money — CEO Reed Hastings infamously told reporters in 2016 that: "We love people sharing Netflix. As kids move on in their life, they like to have control of their life, and as they have an income, we see them separately subscribe. It really hasn’t been a problem" — the Californian company reversed course last year.
"Your Netflix account is for you and the people you live with – your household," a warning email sent to millions of subscribers reads. It offers the chance to add an additional person to your Netflix account for £4.99 each.
It's clear that Disney CEO Bob Iger has been watching Netflix's progress from the sidelines.
And he's been very impressed with what he's seen.
“Netflix is the gold standard in streaming,” Mr Iger told US network CNBC. "They’ve done a phenomenal job and a lot of different directions. I actually have very, very high regard for what they’ve accomplished. If we can only accomplish what they’ve accomplished, that would be great."
Disney+ will start by blocking password-sharing in a few hand-picked countries, including the UK, before rolling out the practice worldwide in September once any kinks have been ironed out. The Disney executive had previously hinted subscribers would see password-sharing restricted this year.
Many major streaming services are impacted by password sharing – where users share their login with family and friends who live elsewhere, enabling them to access content without paying for it – despite it being against platform rules.
Speaking about the crackdown as a way of supercharging revenue, CEO Bob Iger said Disney+ would be “launching our first real foray into password sharing” in June, adding the move would help “turn this business into a business that we feel really good about”.
To block Disney+ subscribers from sharing their login details, Disney has confirmed that it'll incorporate new technology that identifies when someone outside of your household is trying to watch on your account. If you want to allow people outside of your household to continue watching, you’ll need to pay an “additional fee” — although Disney hasn’t revealed how much that will cost.
Disney CEO Bob Iger teased plans to crack down on password-sharing last year, but this is the first time we’ve had a concrete release date from the entertainment behemoth.
It comes as few months after Disney+ quietly updated its small print to explicitly ban users from sharing a single subscription with people outside of their household. The new terms of service started to apply to new subscribers on January 25, but didn't apply to existing subscribers until March 14, 2024.
With both of these deadlines in the rearview mirror, Disney+ can now start to clamp down on password-sharing for its paid subscribers worldwide. We'll need to wait to find out exactly where the first trials will take place, or how much subscribers will need to spend to let someone outside of your immediate household stream TV shows, documentaries, and movies on your Disney+ account.
If the plans to crackdown on password-sharing found familiar, it’s likely because Netflix pursued a very similar policy — to enormous financial success — with its subscribers last year. The US company now requires all subscribers to set up a Netflix Household. This serves as a primary location, linked to your household broadband connection, for any devices signed in with your account information.
While you’re still allowed to travel with mobile devices, like an iPhone or Android phone, any other Smart TVs, streaming dongles, or Sky and Freeview set-top boxes will warn that you’re outside of your Netflix Household and prompt you to change the associated location ...or add an extra paid member to your subscription at the rate of £4.99 a month per person.
If you haven’t manually set a Netflix Household for your account, it will be set automatically based on the location where you most frequently stream from the video on-demand service.
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While Disney has stayed tight-lipped about the specifics, we’d expect its password-sharing crackdown to use a similar system.
“While we are still in the early days and don’t expect notable benefits from these paid sharing initiatives until the back half of calendar 2024, we want to reach as large an audience as possible with our outstanding content,” Disney’s Hugh Johnston told investors during a recent earnings call.
“And we’re looking forward to rolling out this new functionality to improve the overall customer experience and grow our subscriber base.”
Last year, Disney+ overhauled its offering in the UK, replacing the previous one-subscription-fits-all approach with three different price tiers.
As part of the shake-up, it introduced a new ad-supported plan that allows viewers to access the streaming platform’s content for a cheaper price of £4.99 compared with its ad-free plans.
Subscribers to the new tier will be able to have two streams playing at the same time but they will not be able to download TV series, documentaries, and films to watch offline on devices.
The more expensive ad-free tiers include the standard package at £7.99, or £79.90 annually, which has the same video and audio quality as the lower level but allows for downloads on up to 10 devices, while the premium model at £10.99, or £109.90, has improved video and audio quality and allows four devices to watch concurrently.
Disney+ exclusively hosts series including The Bear, Welcome To Wrexham, and Coleen Rooney: The Real Wagatha Story. It also launched a new series following the Kardashian-Jenner family last year, titled The Kardashians, which follows on from its predecessor, Keeping Up With The Kardashians, in documenting the personal lives and business ventures of the siblings.
Of course, the Netflix rival is also home to the animated classics that are most associated with the Walt Disney brand, including The Lion King, The Jungle Book, Cinderella, Frozen, and Encanto.
Additional Reporting By Martyn Landi, PA Technology Correspondent
