Netflix Crackdown Spreading To Major Streaming Services

Hulu, owned by Disney, recently notified its subscribers via email that it would be implementing restrictions on account sharing outside households starting March 14. The new policy ensures users do not impersonate others by sharing usernames, passwords, or account information. It aligns with the updated user agreements for Hulu, Disney+, and ESPN+, which prohibit these practices.

The updated terms, effective on January 25, give Disney the right to analyze user accounts to ensure compliance with password-sharing rules. Per the user agreement, violators may face consequences ranging from account limitations to termination. The Netflix-like move is not unexpected, as CEO Bob Iger hinted at addressing password sharing during Disney’s fiscal third-quarter earnings call in 2023.

Iger emphasized the company’s commitment to prioritizing this and identified it as an opportunity to bolster their business growth. “We certainly have established this as a real priority,” said Iger. “We actually think that there’s an opportunity here to help us grow our business.” The CEO will provide more insights into Disney’s password-sharing crackdown during the first-quarter earnings call on February 7.

Disney’s decision to enforce password-sharing restrictions follows a successful crackdown by Netflix, which reported a surge in new subscribers after implementing stringent measures against unauthorized account access. The streamer recorded several new subscribers in the fourth quarter, signaling the effectiveness of its efforts in pushing password “borrowers” to become paying subscribers.

Since streaming services have become the entertainment platforms of choice worldwide, companies like Disney and Netflix are intensifying efforts to protect their revenue streams and boost user engagement. The crackdown on password sharing is a means of ensuring fair usage and a strategic move that ultimately benefits the companies and their shareholders.

Netflix began eliminating password sharing in the United States in May 2023. Under its new rules, each account is restricted to a single household and its residents. However, subscribers in the US and specific regions still have the option to include an external member for an additional $7.99, or that person can transfer their profile and create a separate account.

At the time, the streaming giant expressed confidence in its content library, citing upcoming releases as a reason for account borrowers to transition into full-fledged memberships. Initially introduced in the United States, the paid account-sharing initiative has now expanded to over a hundred countries, constituting a substantial portion of Netflix’s revenue.

However, the Netflix password-sharing crackdown sparked a backlash, with many angry users threatening to cancel their subscriptions. People feel the move is unfair to individuals facing financial challenges, especially during tough economic times.

Fortunately, Netflix has a range of subscription plans, with monthly costs varying from $6.99 to $22.99. The available plans include Standard with Ads, Standard, and Premium. The once-popular Basic plan at $9.99 has been recently discontinued for new or returning members and is gradually being phased out. Users still enjoy the flexibility of canceling their subscription at any time.

Source: CNN Business