The days of sharing a password so you can watch streaming TV services may be coming to an end. Last year, Netflix cracked down on the practice and on February 6, Disney sent emails to its subscribers to let them know the terms of service are changing and will make it hard for people to share passwords so someone outside the household can watch Disney Plus for free. Here’s what’s happening and why.
When Netflix introduced a password crackdown in the U.S. and U.K. in 2023, some thought it was a gamble, with predictions that people would desert the service in their droves. The company even said this would happen in a note to shareholders last April, saying “We see a cancel reaction in each market when we announce the news, which impacts near term member growth.”
However, Netflix was doing it because it saw this as a temporary dip: “As borrowers start to activate their own accounts and existing members add ‘extra member’ accounts, we see increased acquisition and revenue.”
The Date It All Starts: March 14
So, Disney is doubtless expecting the same process now. The new terms of service have already come into effect for new subscribers. For existing ones, the restrictions will land on March 14.
The new terms say that Disney can “analyze the use of your account to determine compliance” with the new rules.
Exactly how the company will achieve this, though, has not been made public. Most likely, it will mimic what Netflix has done, where you are required to set a household as your primary location, linked to your home broadband. If someone is streaming the service outside the household, the account holder gets a warning that it’s been spotted and invited to add an extra paid member to the subscription. If Disney is doing it this way, it will in due course specify what the cost of this will be, but it hasn’t yet.
During a call with shareholders on February 7, Disney’s Chief Financial Officer, Hugh Johnston, seemed to confirm a similar process when he said, “Later this calendar year, account holders who want to allow access to individuals from outside their household will be able to add them to their accounts for an additional fee.”
Johnston also gave an idea about how long it would take, not for the implementation but for the company to see financial benefits from the move. He said, “While we are still in the early days and don’t expect notable benefits from these paid sharing initiatives until the back half of calendar 2024, we want to reach as large an audience as possible with our outstanding content, and we’re looking forward to rolling out this new functionality to improve the overall customer experience and grow our subscriber base.”