Canadian Disney Plus viewers using a shared password have a month to start streaming on their own dime, according to a recent announcement made by the entertainment platform.
In an email sent out to users this week, Disney explained that it's going to start implementing restrictions on users sharing passwords with people outside their households from November 1st. It's unclear whether these limits will be extended to US users.
As Disney fights to increase its paid subscribers after a disappointing Q3 earnings call, this move follows an extremely lucrative crackdown made by steaming giant Netflix earlier this year.
Disney Plus's Password Sharing Clampdown Begins
Popular streaming platform Disney + has informed its Canadian customers that it will be restricting password sharing from November 1.
In an email sent out to subscribers, the entertainment company states “We’re implementing restrictions on your ability to share your account or login credentials outside of your household”. They also told users “You may not share your subscription outside of your household” in its recently updated Help Center.
While it's unclear what exact action will be leveraged against those guilty of using shared credentials, Disney's Canadian subscriber agreement outlines that the company may “analyze the use” of culpable accounts, which could lead to account limits or termination.
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Disney Plus's Growth Has Buffered
Disney's pending Canadian crackdown comes a month after the company expressed issues with retaining users in its Q3 earnings call.
In the conference, Disney CEO Bob Iger announced that US and Canadian subscribers have dipped from 46.4 million to 46 million between October to December 2022. He also explained that its Indian service has hemorrhaged over 12 million users since April.
As a result of these losses, the company declared that it's ‘actively exploring' ways to tackle password sharing and “will begin to update our subscriber agreements with additional terms and our sharing policies” later this year.
“We certainly have established (password sharing) as a real priority, and we actually think that there’s an opportunity here to help us grow our business.” – Bob Iger at Disney's Q3 Earning Call
The kid-friendly streaming giant also used the call to announce some major changes to its pricing structure. On September 6, the company will be launching a new $19.99 ad-free bundle with Hulu on September 6, while the price of individual subscriptions is set to rise from October 12.
Will Disney's Password Policy be as Successful as Netflix's?
Disney's user crackdown hasn't come out of the blue. Its latest efforts echo similar actions made by streaming rival Netflix earlier this year.
After losing revenue to password sharers for years, Netflix began charging US subscribers $8 extra for additional users that live outside their household in May – and the results were outstanding.
In the four days following the change, the streaming company witnessed its four largest days of US user acquisition on record, according to data from media research firm Atenna. The trend also continued into the next month, with a total of 2.3 million additions being recorded from May to July.
With major streaming services struggling with increased competition and shifting consumer preferences, the success of Netflix's password crackdown has offered some hope for the industry. And with Disney's CEO claiming that a “significant” amount of Disney+ rely on borrowed credentials, the potential for growth could be huge.
