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Disney’s Crackdown on Password Sharing

April 7, 2024 | by Herzen Garcia

Disney has vowed to crack down on password sharing for its Disney+ streaming service as part of a drive to increase subscriber numbers and turn a profit for the business.

Changes in Authentication Process

Bob Iger, CEO of the Walt Disney conglomerate, outlined how changes will take effect in June in some jurisdictions with a wider enforcement of login credentials to be applied by September.

Speaking to CNBC, Iger tipped his hat toward rival service Netflix after it brought in similar curbs on password sharing, resulting in a massive addition of 100,000 new accounts just two days after its crackdown was applied.

Acknowledging Netflix’s Influence

He stated, “Netflix is the gold standard in streaming. They’ve done a phenomenal job in a lot of different directions. I actually have very, very high regard for what they’ve accomplished. If we can only accomplish what they’ve accomplished, that would be great.”

The CEO made his comments the following day after Disney investors renewed their faith in him and his company director peers in a proxy battle with activist investors, including Nelson Peltz, who was unhappy with the results of the streaming service.

Iger acknowledged concerns while stressing the need for consolidation in the streaming industry, with Disney ready to act to “eventually” achieve double-digit margins.

In response, Peltz gave a follow-up interview to CNBC immediately after the Disney CEO, stating he would retreat to the sidelines as long as Iger and the board deliver on their words.

“If they do it, they won’t hear from me again,” Peltz said.

Previous Commitments to Address Password Sharing

Action on passwords has been expected for some time after remarks made on an earnings call with investors last year.

At the time, scope was given for Disney to achieve gains by following up on the pledge made by Iger, who intimated, “We certainly have established this as a real priority.”

“We actually think that there’s an opportunity here to help us grow our business,” he told the third-quarter earnings call.

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