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Credit: DisneyAccording to a recent company earnings release in a letter to shareholders, Netflix plans to bar users from sharing passwords for free by the end of March of this year.
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In the fall of 2022, Netflix told investors and streaming subscribers that it would begin charging subscribers who share their accounts. However, the streaming giant failed to provide anyone with a specific date or information for when the new policy would be enforced. During the most recent earnings report released late last week, Netflix revealed that it would implement the paid sharing system across the platform in the latter portion of the first quarter of 2023.
In a letter to shareholders, Netflix said that “today’s widespread account sharing (100M+ households) undermines our long-term ability to invest in and improve Netflix, as well as build our business. While our terms of use limit the use of Netflix to a household, we recognize this is a change for members who share their account more broadly.”
According to a report from Business Insider, Netflix has already rolled out a trial of paid sharing in some Latin American countries, including Chile and Peru. Members will now have to pay an extra $2 or $3 for member accounts made for people living outside the given household.
The real question is, now that Netflix has officially decided to crack down on password sharing, will The Walt Disney Company follow suit on its streaming services included in the Disney bundle, such as Disney+, Hulu, and ESPN+? In April 2022, The Walt Disney Company sent a survey to customers of its Disney Plus streaming service in Spain, asking subscribers if they share their passwords with viewers who live outside their immediate home address.
There was speculation that the survey results posted to Twitter last year may suggest that Disney could begin cracking down on password sharing to curb freeloaders who watch TV shows and movies without paying for a subscription. Before Netflix decided to put its foot down on password sharing, it tested various ways to curb password sharing for its streaming service in several Latin American countries.
Such a move could hurt the reputation of The Walt Disney Company. However, with much pressure on Disney CEO Bob Iger to show profitability within Disney Plus and its streaming segments, he may have to begin cracking down on sharing passwords.
Would you be upset with Disney if the company decided to crack down on password sharing?