Disney wants to stop account sharing and instead introduce paid account sharing to make the streaming service more profitable. The House of Mouse is taking its cue from Netflix.
It is not yet known how high the surcharge per additional household will be for paid account sharing.
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The sparrows have been whistling it from the rooftops for a long time: Disney wants to stop account sharing this year. This was confirmed by Disney CEO Bob Iger in an interview with CNBC. Account sharing has been banned for a long time - since the adjustment of the terms of use last November. The streaming service is now to be transformed into a so-called "growth business", i.e. a growing business division that no longer generates losses but profits.
In order to achieve this, Disney wants to test paid account sharing in the first few countries this June and then introduce it worldwide in September. The streaming division, which also includes Hulu and ESPN+, should finally become profitable by the end of 2024. The megacorporation promised its investors this a year ago, according to the Los Angeles Times.
Account sharing is the sharing of passwords with people outside of your own four walls, which is prohibited by most streaming services. If you still want to share your password legally, you can do so with Netflix, but only with a maximum of two other households - and only for an additional charge of 5.90 francs per month each. This is known as paid account sharing.
It's not hard to guess who Disney - and probably soon all other remaining streaming services - is taking as a role model: Netflix. After all, the streaming pioneer is still demonstrably the only profitable streamer in the world. Disney, for example, is still losing hundreds of millions of dollars per year with its three streaming services, despite savings of several billion (!) dollars. Other companies that operate a streaming division do not even provide precise information about turnover and profitability. Also a message.
Netflix has already shown the way. First, it introduced the advertising-supported plan in key markets such as the USA, the UK and Germany. It then banned account sharing and introduced paid account sharing a little later. In the latest step, the basic subscription is to be cancelled completely by the middle of the year in order to drive viewers towards an ad-supported plan. Although this is cheaper for consumers, Netflix earns more per plan than through the normal basic subscription thanks to the additional advertising subsidies. A win-win for Netflix and those who are prepared to put up with ad breaks.
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The fears - or hopes, depending on your perspective - that customers would flock to the currently cheaper competition because of such scams did not materialise. Instead, Netflix recorded the fastest growth in subscriptions in its history. By the end of 2023, not only sales and profits had grown, but also the number of active plans to over 260 million - a record
Netflix has been doing for years what the other streaming services have only been trying to do: Driving revenue per plan high enough to at least cover the costs of producing content and operating the service. Disney CEO Bob Iger can only dream of this. Thanks to massive savings and redundancies, he was able to make important corrections on the cost side. But now, on the other side of the equation, revenue per plan must also grow - just like at Netflix. So that there is finally a balance.
