Warner Bros. Discovery (WBD), the media conglomerate behind the streaming platform Max, has announced plans to restrict password-sharing in a move executives themselves describe as a form of “price rise.” During its recent third-quarter earnings call, WBD confirmed that a password crackdown would begin in late 2024 and extend into 2025 and beyond. This latest decision mirrors similar strategies by competitors like Netflix and Disney+, which have also clamped down on password-sharing to boost revenue. However, WBD’s forthright explanation makes it clear: the real goal is increasing revenue under the guise of preventing unauthorized account sharing.
Password Sharing Crackdown: A Transparent Price Increase
Warner Bros. Discovery’s Chief Financial Officer, Gunnar Wiedenfels, described the upcoming password restrictions as “in effect… a form of a price rise.” This statement underscores a broader strategy: rather than simply restricting unauthorized access, the company’s real intent is to generate additional revenue by targeting users who share their accounts across multiple households. Unlike Netflix or Disney+, which introduced password-sharing restrictions with more guarded language, WBD’s blunt approach to framing the change as a “price rise” emphasizes the company’s willingness to pursue consumer dollars more directly.
The crackdown will reportedly involve “soft messaging” to notify users that account-sharing restrictions are coming. Initially, this may be limited to emails informing customers of the change before enforcement begins. While details are still emerging on how the crackdown will work, the strategy may resemble Disney’s approach, which offers extra “shared access” accounts for an additional monthly fee of around $7 or more.
Streaming Prices on the Rise Amid WBD’s Cost-Cutting Strategy
Max, formerly known as HBO Max, already raised its ad-free plan prices earlier in 2024, bumping monthly costs by $1 to $17, or $170 for an annual subscription. Meanwhile, Max’s premium “Ultimate” ad-free tier, which includes additional device access and offline downloads, increased to $21 per month or $210 annually. This price increase is one of many across streaming services, as the industry faces challenges balancing subscriber retention with revenue growth.
These price hikes reflect a broader shift in the streaming industry: companies are seeking new ways to extract revenue from a limited subscriber base. By cutting down on password-sharing, WBD aims to capitalize on users who rely on friends or family for streaming access without having their own subscriptions. Although the change will impact only a portion of Max’s subscribers, it is expected to bring in significant additional revenue over time.
Subscriber Growth Amid a Changing Streaming Landscape
Despite recent cost increases, Warner Bros. Discovery reported subscriber growth for both Max and Discovery+ platforms, which combined reached 110.5 million subscribers by the third quarter of 2024, up from 103.3 million in June. The Paris Summer Olympics contributed to this surge, driving short-term viewership gains. However, maintaining these new subscribers may prove challenging amid higher subscription costs and potential password-sharing restrictions, both of which could lead to cancellations among price-sensitive viewers.
CEO David Zaslav, who received a 25% pay increase this year, has spoken about the need to make WBD’s streaming assets more profitable. Zaslav’s strategic emphasis on reducing costs and streamlining operations aligns with the password crackdown, which he describes as part of a drive toward “increased revenue and profitability.” This language reflects a growing trend across the streaming sector: platforms are moving away from subscriber growth at any cost and increasingly focusing on monetizing each user.
Consumer Costs Rise as Streaming Prices and Segmentation Grow
The Max password crackdown and price hikes add to a broader financial burden for American streaming households. A recent Deloitte study revealed that U.S. households are spending more than $61 monthly on various streaming services, marking a 27% increase from 2023. This figure predates the most recent price hikes by Max and Disney+, which could push monthly household streaming budgets even higher. As the streaming industry becomes more segmented, households must pay for multiple platforms to access desired content, making the average viewer’s entertainment costs increasingly fragmented and expensive.
The trend of rising costs and segmented content libraries has frustrated consumers, many of whom feel that subscription-based entertainment is growing less accessible. The recent wave of streaming cost hikes, combined with anti-password-sharing measures, threatens to create an environment in which only viewers willing to pay substantial monthly fees have access to a comprehensive array of content. These practices, while profitable for companies, have led to mounting criticism of streaming giants who prioritize revenue growth over consumer satisfaction.
As Warner Bros. Discovery and other companies tighten their approach to password-sharing and increase subscription fees, the backlash against these strategies may intensify. While some subscribers may comply with the changes, there is a risk that price-sensitive viewers could turn to alternative or less costly platforms. Recent reports suggest that frustration over rising streaming prices and restrictive policies could lead some users to reduce or consolidate their subscriptions, potentially impacting the bottom line for major streaming companies.
For Warner Bros. Discovery, the success of these strategies will ultimately depend on whether its password-sharing crackdown and other revenue-generating tactics can coexist with customer retention. The short-term gains from these policies could be offset if subscribers, frustrated by the limitations and rising costs, opt to cancel their accounts. As the streaming landscape evolves, companies may need to find a balance between profitability and providing an experience that justifies the rising costs to consumers.
Warner Bros. Discovery’s new password-sharing crackdown strategy highlights the lengths to which streaming companies are willing to go to boost revenues. By openly framing these measures as a form of price increase, WBD’s executives have drawn attention to the evolving relationship between streaming platforms and their subscribers. As companies like WBD, Disney+, and Netflix intensify efforts to maximize revenue from each account, subscribers face a rapidly changing landscape where content is becoming more expensive to access.
Whether Warner Bros. Discovery can retain its current subscriber base while increasing prices and cracking down on account sharing remains to be seen. For now, these trends reflect the broader struggles facing the streaming industry, where profitability increasingly takes precedence over affordability, leaving consumers to bear the burden of rising costs.
