Disney’s Password Sharing Crackdown Proves Successful, CFO Hugh Johnston Reveals

Disney’s recent strategy to curb password sharing has been effective in boosting subscriber numbers, according to Disney CFO Hugh Johnston.

At the UBS Media and Communications Conference, Johnston mentioned that this policy, which has been gradually introduced, is expected to positively impact the company’s earnings right from the start, with gains anticipated to increase each quarter.

Johnston highlighted that advertising and the reduction of password sharing are becoming significant contributors to the profitability of their streaming services. He also noted that Disney is actively exploring additional ways to adjust pricing.

In a blog post last September, Disney outlined its new password sharing policy, announcing its implementation in various regions including the U.S., Canada, Costa Rica, Guatemala, Europe, and the Asia-Pacific area. This followed an initial launch in certain markets the previous summer.

According to the blog post, users who attempt to access an account from outside the primary account holder’s home will need to either pay for their own subscription or join as an Extra Member on the main account, costing $6.99 per month for Disney+ Basic and $9.99 per month for the Premium plan.

Netflix led the way in charging for password sharing, rolling out a new policy worldwide in 2023, and noting financial benefits in its reports. Following suit, Warner Bros. Discovery has also announced plans to implement a similar policy with its Max service.

Johnston emphasized that generating revenue through advertising on Disney+ will play a major role, pointing out Disney’s extensive experience in ad monetization compared to its streaming rivals.