Looking to drive profitability and bolster new signups, Disney+ has set key dates for the next steps in its strategy to monetize users piggybacking on the accounts of legit subscribers.

Characterized by Disney CEO Bob Iger in an interview with CNBC as the streamer’s “first real foray into password-sharing,” the phased rollout will start in select markets this June, with global implementation by September.

The crackdown has been in the works and on people’s lips for some time. Last August, Iger acknowledged that password-sharing among Disney+ subscribers was “significant” during the company’s Q3 earnings call. And then in November, Disney+ began updating subscriber agreements in Canada, informing customers that they should refrain from sharing accounts beyond their own household. These warnings have since been issued as part of similar updates in all territories, including the US earlier this year. 

In the final quarter of 2023, the platform shed 1.3 million subscribers in the US/Canada on the heels of a price hike, ending the year with roughly 111 million users globally (excluding Disney+ Hotstar in India). Reporting on this quarter in February, CFO Hugh Johnston teased: “[Beginning] this summer, Disney+ accounts suspected of improper sharing will be presented with new capabilities to allow their borrowers to start their own subscriptions.” 

It’s a strategy that takes a page out of Netflix’s playbook. The streaming giant was the first SVOD platform to go on the password-sharing offensive, staging limited testing in markets like Canada, New Zealand, Spain and Portugal before going wide in 100-plus countries last May. Netflix started off by offering an “extra member” option, allowing subscribers to add someone from outside their household for an additional US$7.99 per month. According to Investor’s Business Daily, Netflix’s stock rose by 2.5% to close at 364.85 in the wake of this announcement. 

The early results came to light in the company’s Q2 2023 financial report, which revealed a  5.89 million bump in subscribers—though it was unclear how much of this was explicitly due to the password-sharing crackdown that only expanded midway through the quarter. Despite the increase, Netflix’s share price dipped by more than 8% after the earnings call since investors expected a bigger impact.

However, a promising surge was simmering under the surface. Netflix’s Q3 results—the first quarter to fully measure post-crackdown performance—revealed that the streamer had added a whopping nine million subscribers globally and generated US$8.5 billion in revenue (an 8% increase from the same period the previous year). 

It remains to be seen what impact Disney+ will experience with its password-sharing strategy, although as with Netflix, it will surely take several months before this is evident. 

Talking to CNBC, Iger also highlighted that Disney+ has been able to climb to second place behind Netflix in terms of global streaming volume, despite only launching in 2019. And he reiterated that Disney’s DTC unit is poised to be profitable by Q4 this year after losing a greater-than-expected amount of money in recent years. “Part of that was because we were chasing subscriber growth and were not as focused as we needed to be on the bottom line,” he said.

Among other streaming strategies being considered, Iger also noted: “We need to reduce the cost of marketing, we need to reduce the cost of customer acquisition to get the margins up obviously. I think we have to program more smartly, particularly outside the US, picking the markets where we could really move the needle with strong local programming.”

Warner Bros. Discovery is next in line to address password-sharing for its streaming service Max. At last month’s Morgan Stanley Technology, Media & Telecom conference, the conglom announced that its crackdown efforts will start in late 2024 and continue into 2025.