Variety: Disney+ Will Begin Cracking Down on Users Suspected of ‘Improper’ Password Sharing This Summer

Story from Variety:

Disney is going to start trying to convert password-piggybackers into paid customers — following the lead of Netflix — starting this summer.

Disney+ and Hulu over the past week have been notifying U.S. customers of changes to their subscriber terms, which now explicitly forbid users from sharing their log-in details with anyone who doesn’t live in their primary residence. Those go into effect for existing subscribers March 14.

On Wednesday’s call with investors, Disney CFO Hugh Johnston said, “As it relates to the opportunity we see on paid sharing, beginning this summer Disney+ accounts suspected of improper sharing will be presented with new capabilities to allow their borrowers to start their own subscriptions.” Later in 2024, he said, Disney+ account holders who want to allow access to individuals outside their household will be able to add them to their accounts for an additional fee.

“We’re still in the early days” of the password crackdown, Johnston added, and he said the company doesn’t expect “notable benefits” from the paid-sharing initiatives until the back half of calendar year 2024. “We want to reach as large an audience as possible with our outstanding content,” he said. “And we’re looking forward to rolling out this new functionality to improve the overall customer experience and grow our subscriber base.”

For the last three months of 2023, Disney+ lost a net 1.3 million subscribers in its “core” markets (excluding Disney+ Hotstar), attributing the contraction to price hikes it enacted in the quarter. In the current quarter ending in March, Disney projected adding between 5.5 million and 6 million subscribers to “Disney+ Core.”

Disney is hoping that it can follow in the footsteps of Netflix on the paid-sharing front. Netflix execs have credited the broad account-sharing initiative, which kicked off last year in more than 100 countries, with helping to boost subscriber numbers.

According to the updated subscriber agreements for Disney+ and Hulu, “Unless otherwise permitted by your Service Tier, you may not share your subscription outside of your household.” The term “household” means the collection of devices “associated with your primary personal residence that are used by the individuals who reside therein,” according to the agreements.

“We may, in our sole discretion, analyze the use of your account to determine compliance with this Agreement,” the updated terms say. “If we determine, in our sole discretion, that you have violated this Agreement, we may limit or terminate access to the Service and/or take any other steps as permitted by this Agreement.”