Disney's (DIS) password-sharing crackdown has officially begun.
According to a blog post, Disney+ launched the practice in the US and other regions this week, with the option for households to add an "outside" extra user at a discounted rate.
Users who share an account with someone outside of their household can add an “Extra Member” for $6.99 per month for Disney+ Basic (with ads) or $9.99 for Disney+ Premium (ad-free).
Disney defines a household as "a collection of devices associated with your primary personal residence that are used by the individuals who reside there."
Only one extra member is available per account; however, that option does not exist at this time for households who subscribe to the Disney bundle, which also includes ESPN+ and Hulu.
Disney's moves echo the strategy of Netflix (NFLX), which began implementing its password-sharing crackdown for US subscribers last May after first announcing the initiative in October 2022. Warner Bros. Discovery’s (WBD) Max streaming platform has also joined in on the trend, revealing it will crack down on account sharing later this year.
Disney CEO Bob Iger, who previously said the number of subscribers sharing accounts is "significant," first revealed the company would address password sharing last August and has teased the upside revenue potential in subsequent earnings calls.
Disney recently updated Hulu subscriber agreements and added additional terms to its sharing policies, which went into effect mid-March.
Disney and other media companies are facing pressure from shareholders to scale their streaming services and achieve long-term profitability. In theory, streamers can boost their subscribers by squashing password sharing, assuming the move doesn't first turn users off of their services.
But that might be a tall order as the consumer becomes more choosy. According to subscription analytics platform Antenna, more subscribers canceled their streaming plans in August compared to July, with overall churn rates hovering at 5.2% — the highest level since February.
Still, media companies are hopeful the crackdowns will eventually force users sharing accounts to get their own subscriptions, which have recently gotten more pricey.
Virtually all of the major streaming companies raised the cost of their respective services throughout the course of last year, a trend that has continued in 2024.
In August, Disney announced it would again raise prices across its Disney+ and Hulu plans, with these changes set to take effect in October, alongside the Disney+ debuts of "Agatha All Along" and "Inside Out 2."
Prior to that announcement, Comcast's (CMCSA) flagship streaming service, Peacock, implemented price hikes in July, just ahead of the 2024 Paris Olympics, after it upped prices for the first time last summer.
And in June, Warner Bros.' Max raised prices for its ad-free streaming plans, also ahead of key programming: the second-season debut of its blockbuster "Game of Thrones" prequel, "House of the Dragon."
Alexandra is a Senior Reporter at Yahoo Finance. Follow her on X @alliecanal8193 and email her at alexandra.canal@yahoofinance.com
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