Disney: CEO Iger reveals timing against account sharing, sort of

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“In June, we’ll be launching our first real foray into password sharing,” disclosed Disney CEO Bob Iger, in an interview on CNBC’s business program Squawk on the Street.  “Just a few countries in a few markets, but then it will grow significantly with the full rollout in September,” he said.

The news is in the timing.  Disney has been declaring its intentions to strengthen its sharing policies since summer of 2023, and in January 2024, changed the Terms of Use for both Disney+ and Hulu to say that “(Y)ou may not share your subscription outside your household … (which consists of) the collection of devices associated with your primary personal residence that are used by the individuals who reside within.”

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Account sharing is a small part of a comprehensive effort to turn streaming into a profitable business for The Walt Disney Company.  Mr. Iger summarized it best: “We launched Disney Plus … just over four years ago… (W)e ended up losing a lot of money on that… because we were chasing sub growth and (were) not as focused as we needed to be on the bottom line. The losses were around $4 billion a year.”

“Now, what we have to do is turn – and not just into a profitable business, but into a growth business, a business that has margins that this company and our shareholders would be proud of,” he said.

Not satisfied with number two

When the CNBC interviewer suggested “You wanna clearly be the #2 to Netflix,” Mr Iger pulled no punches: “I wouldn’t say that’s necessarily the goal … Netflix (has) done a phenomenal job in a lot of different directions,” he said. “You know I actually have very, very high regard for what they’ve accomplished … if we could only accomplish what they’ve accomplished that would be great.”

Open questions

Since the company has specified end-user terms of use, and has given a sense of the timing, the remaining questions include “How will out-of-household users be detected,” “How much will it cost?,” and “How will the policy be enforced?”

Further details

Disney CEO Bob Iger on streaming: “We have to turn it into a growth business,” Squawk on the Street. TV program. April 4, 2024, CNBC

MAX, Disney+ follow Netflix to limit password sharing – but does it go too far?  Article. March 8, 2024. Piracy Monitor

Why it matters

Video providers – particularly top tier media companies and distributors – are reluctant to leave any bread crumbs that might lead abusers to try stealing content or services. But credential and account sharing is just a small part of the complete picture.

Mr Iger gave a sense of the full challenge in this interview.  In pursuit of more engagement: “We need more engagement… We need the technological tools to lower churn, create more stickiness. That’s things like recommendation engines, getting to know our customers better. We need to reduce the cost of marketing. We need to reduce the cost of customer acquisition. To get the margins up, obviously I think we have to program a more smartly, particularly outside the United States,” he continued.

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