Bob Iger, CEO of Disney (NYSE:DIS), commended Netflix (NASDAQ:NFLX) as the benchmark for streaming services during Disney’s second quarter earnings call, revealing that Disney will soon enforce its own measures against password sharing. Iger was impressed by the positive outcomes of Netflix’s recent password-sharing initiative and plans to incorporate similar strategies to drive growth for Disney.
He remarked, “Netflix is, in many respects, the gold standard of streaming. We are developing similar technologies that Netflix has pioneered for over a decade, aimed at improving our bottom line, starting with curbing password sharing.”
Netflix has been implementing its password-sharing crackdown in the U.S. since May, following its announcement in October 2022. This initiative has set a precedent within the industry as Netflix continues to be the only streaming service consistently profitable.
Similarly, Warner Bros. Discovery’s (NASDAQ:WBD) Max streaming service is set to start limiting password sharing later this year, with a broader implementation expected by 2025, as reported by Yahoo Finance.
Iger stated that Disney’s own password sharing enforcement will commence next month in select markets, with a global launch planned for September. The move comes after recognizing the significant number of subscribers sharing accounts, an issue Disney highlighted last year.
“We are now actively addressing improper password sharing,” Iger stated confidently. “We are optimistic about the potential impact on our operations.”
These developments are part of Disney’s broader strategy to achieve sustained profitability in its streaming business, an important focus as the company experiences a decline in its traditional linear TV operations.
Despite achieving profitability in its direct-to-consumer segment, which includes Disney+ and Hulu, for the first time in the fiscal second quarter, Disney anticipates weaker performance in the near term. The segment, including ESPN+, reported a loss of $18 million, a substantial improvement from the $659 million loss a year earlier. Disney is optimistic about reaching full streaming profitability by the end of this fiscal year.
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