Disney+ Takes Action Against Password-Sharing, Hikes Streaming Prices

In a significant move reminiscent of Netflix's actions, Disney+ is gearing up to address the issue of password-sharing starting in 2024. During a recent earnings call, Disney's CEO, Bob Iger, revealed the company's plans to curb this practice, which has been causing substantial financial losses. The move comes as part of Disney's broader efforts to optimize its streaming service's revenue model.

Disney+ Takes a Stand Against Password-Sharing

Iger emphasized that Disney+ is actively exploring various approaches to tackle the problem of password-sharing. He expressed the company's commitment to finding optimal solutions for subscribers who want to share their accounts with friends and family. The strategy includes updates to subscriber agreements, the introduction of additional terms, and refining sharing policies. These changes are expected to be unveiled later this year, with a comprehensive rollout planned for 2024.

Learning from Netflix's Lead

The decision to combat password-sharing follows in the footsteps of Netflix, which implemented similar measures earlier in the year. Netflix's move proved successful, contributing to increased revenue and surpassing expectations for new subscriptions. Disney+ aims to replicate this success while enhancing its own subscription revenue and overall business model.

Subscription Prices on the Rise

Beyond the focus on password-sharing, Disney also announced its plans to adjust subscription prices. Effective from October 12, Disney+ Premium subscription costs will rise from $10.99 to $13.00 per month, while Hulu's price will increase from $14.99 to $17.99 per month. This adjustment marks the second price change for Disney+ in less than a year.

Disney's Streaming Commitment

Iger reaffirmed Disney's commitment to streaming, considering it a crucial element of the company's future growth. He described the streaming business as relatively "young" and emphasized its significance as a foundational pillar for Disney's continued success.

Financial Performance Highlights

Disney's Q3 revenue witnessed a 4% increase to $22.33 billion compared to the previous year. While slightly falling short of Wall Street's estimates, this growth showcases Disney's resilience amidst challenging market conditions. Earnings per share reached $1.03, excluding specific items, surpassing the projected 95 cents per share.

During the quarter, the company faced $2.65 billion in impairment and restructuring charges. These charges accounted for expenses linked to content removal from streaming services, termination of licensing agreements, and $210 million allocated to severance payments for laid-off employees.

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