With the rise of premium streaming services, password sharing has become a concern for companies like Disney. In its Q3 2023 earnings call, Disney CEO Bob Iger acknowledged the issue and revealed plans to implement new policies to restrict password sharing among Disney+ subscribers. While the exact details of these policies have not been disclosed, Iger emphasized that a significant number of people have been sharing passwords, impacting Disney’s potential revenue. This article explores the implications of password sharing and its future on the Disney+ platform.
The Crackdown on Password Sharing
Prior to Disney, Netflix took the lead in cracking down on password sharing by logging out secondary users from the app. This move proved successful for Netflix, attracting nearly 6 million new subscribers in July alone. Disney anticipates a similar outcome, expecting an influx of new subscribers once password sharing is curbed. However, Iger also acknowledges that implementing effective measures may take time, with potential experimentation required to find the best options for paid subscribers to share their accounts. Disney is prioritizing the update of their subscriber agreements with new terms to combat password sharing.
The Motivation Behind Disney’s Actions
Disney’s decision to address password sharing is strategic, particularly when considering the recent decline in subscribers for Disney+ Hotstar, their brand in India and other South Asian countries. From April to June, the platform lost 12.5 million subscribers due to the loss of streaming rights for the premium cricket tournament IPL to Viacom18. The deal, extending until 2027 and valued at $2.6 billion, undoubtedly impacted subscriber numbers. Additionally, the removal of all HBO content from Disney+ Hotstar further diminished the platform’s appeal, raising questions among subscribers about the value of their subscriptions.
Subscriber Count versus Revenue
While the decline in subscriber count may raise concerns, it is essential to consider the difference in revenue generated by Disney+ Hotstar compared to its international counterparts. On average, Disney+ subscribers generate $6.58 per month, whereas Hotstar subscribers contribute merely $0.59 per month. The core Disney+ experience, combined with Hotstar, ESPN+, and Hulu, boasts a global subscriber base of 219.6 million. In comparison, Netflix has recorded 238.39 million subscribers after its crackdown on password sharing. These numbers highlight the discrepancy in revenue despite the disparity in subscriber count.
Disney+ Hotstar Subscription Tiers
In India, Disney+ Hotstar offers different subscription tiers to cater to a diverse audience. The Super subscription, priced at Rs. 899 per year, provides advertisements and a 1080p streaming experience. The Premium subscription, available for Rs. 1,499 annually, removes advertisements and supports Ultra-HD resolution streaming. There is also a Mobile subscription option for Rs. 499 per year, limiting access to one mobile device. These affordable pricing options make Disney+ Hotstar accessible to a wider demographic in India.
The Future of Password Sharing
As Disney+ prepares to introduce new policies to restrict password sharing, the streaming giant hopes to streamline its revenue generation. However, the effectiveness of these measures remains uncertain, and it may take time to achieve the desired outcomes. Disney’s priority is to update subscriber agreements, clearly defining the terms and conditions surrounding password sharing. By taking decisive action, Disney aims to protect its revenue streams and ensure a fair distribution of content to paid subscribers.
Password sharing has become an issue for premium streaming services like Disney+, prompting the company to take action. Disney acknowledges the prevalence of password sharing and plans to roll out new policies in 2024 to address this concern. While the impact on subscriber numbers remains to be seen, Disney is focused on nurturing its revenue streams and curbing unauthorized access to their content. By striking a balance between accessibility and profitability, Disney aims to provide an enhanced viewing experience for its loyal paid subscribers.
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