Disney Plus has joined the group of streaming services that have introduced more limitations on password sharing, with Canada taking the lead in bringing these new guidelines into effect. Canadian subscribers will no longer be able to share their login information with others outside of their immediate family as of November 1.
This move follows Disney CEO Bob Iger’s announcement a month ago, where he declared the company’s intent to address shared accounts, a practice prevalent across Disney’s services. Iger hinted at Disney’s “technical capability” to monitor logins, raising questions about the extent of data tracking involved.
They haven’t given much information about how they intend to enforce these terms yet. Though the company has said that it will be analyzing account usage and identify the subscribers breaking the terms thereby limiting or terminating their account.
Disney Plus has now become the latest streaming service to attempt to restrict password sharing. Other OTT platforms like Netflix have been testing such restrictions for over a year in various countries before stepping up their enforcement in the US in May 2023. Since all member accounts are restricted based on a user’s IP address, subscribers can choose to add more members to their Netflix accounts for an extra fee, depending on the plan they’ve chosen. In its Q2 results call, the company reported that its policy has increased the number of service subscribers.
Streaming services like HBO Max and Hulu, have also taken steps to address password sharing, but none have been as aggressive as Disney Plus. It remains to be seen how effective Disney’s new policy will be, but it is clear that streaming companies are becoming increasingly serious about this issue.
Implications for the Streaming Industry
The crackdown on password sharing is a significant development for the streaming industry. It has the potential to increase revenue for streaming companies, but it could also lead to subscriber churn.
A study by Citigroup estimated that streaming companies lose around $25 billion per year due to password sharing. Restricting password sharing could force more people to subscribe to their own streaming accounts. This would lead to increased revenue for streaming companies. Additionally, it could help to improve the quality of streaming services by allowing companies to invest more in content and technology.
On the other hand, restricting password sharing could also lead to subscriber churn. Some people may decide to cancel their subscriptions if they are no longer able to share them with others. Ampere Analysis found that 34% of consumers who share passwords would cancel their subscription if password sharing is no longer allowed.
In the long run..
In addition to the potential impact on revenue and subscriber churn, the crackdown on password sharing could also have other implications for the streaming industry. For example, it could lead to increased competition among streaming services. As streaming companies become more aggressive in restricting password sharing, consumers may be more likely to switch to a different service if they are unhappy with the restrictions on their current service.
Disney+ crackdown on password sharing could also lead to the rise of new streaming services that cater to consumers who are unwilling to pay for multiple subscriptions. For example, there could be new streaming services that offer a curated selection of content from different streaming services for a single monthly fee. We already have similar open source sites or websites working illegally like TTV+, Popcorn time, Kodi, Soap2day etc. This trend could set up a whole new industry of assorted OTT content.