Disney+, Hulu, ESPN+ to Introduce Paid Password Sharing This Summer; Here’s How Subscribers Will Be Impacted

Disney is in no way ashamed to take a page out of Netflix’s book if it stands to make a profit. Company executives spoke with Wall Street analysts on Wednesday to discuss Disney’s earnings report for its first fiscal quarter and revealed additional details about its plans to put a halt to account sharing. They outlined when subscribers to Disney+, Hulu, and ESPN+ could expect to see notifications about their password-sharing practices, and when customers would be able to start adding extra viewers to their account if they still want to share it.

• Disney will begin its crackdown on sharing passwords in the summer of 2024.
• Later in the year, the company will introduce an option for customers to add a member outside their household to their account, much like Netflix has done.
• Disney does not expect to see financial benefits from paid sharing until the end of this year.

When is Disney’s Crackdown on Password-Sharing Begin?

Disney began making changes to its user agreements for all three of its three streaming services last week. The agreements now specify that a Disney streaming account is only to be used in the household of the purchaser and that those who were found to be in violation of this rule risked having access to their account restricted.

Company CFO Hugh Johnston told analysts during the company’s earnings call on Wednesday that starting this summer, Disney streaming account owners who were suspected of giving out their passwords would be “presented with new capabilities to allow their borrowers to start their own subscriptions.”

In other words, this summer is when Disney streaming subscribers can expect to start seeing prompts to remind them that sharing their accounts is a violation of their user agreement. Disney will also introduce paid sharing later this year, allowing customers who don’t want to kick sharers off their accounts to pay extra in order to let them continue watching without creating an account of their own.

“Paid sharing is an opportunity for us,” Johnston told analysts. “It’s one that our competitor has obviously taken advantage of and one that sits in front of us. And we’ve got some very specific actions that we’re taking in the next couple of months, which I discussed earlier, which will benefit us to some degree in the back half of this year and very much next year.”

How Much Will Sharing an Account Cost on Disney Streamers?

There were no details on how much Disney streaming customers could expect to pay to add someone outside of their household to their account, but Netflix's paid sharing tactics can offer some hints. Netflix made the cost of adding an outside watcher to an account $7.99, whereas the price of an ad-supported Netflix plan is $6.99, further encouraging those with someone else’s password to just make their own account instead.

Disney will likely follow a similar pathway, incentivizing non-subscribers to create accounts of their own via the more profitable ad-supported option. Subscribers who don’t see any change in the way their account can be accessed outside their household immediately shouldn’t be lulled into a false sense of security however; Disney’s crackdown on sharing passwords is coming this summer.

The company sees ending free account sharing as a meaningful way to boost profits going forward. Disney+ has 149.6 million subscribers, and Hulu has another 49.7 million, and while Disney executives declined to put a specific figure on the number of customers who were sharing their accounts with a non-paid person, they did say that the percentage was similar to that of the number of people sharing Netflix accounts before that company’s crackdown. In April 2022, Netflix estimated that 45% of its account holders — around 100 million people at the time — were sharing passwords.

Disney clearly wants to give its customers warning that the crackdown is coming and get them accustomed to the idea instead of executing its plan to stop account sharing all at once. The company expects to see a marked rise in streaming profits from the scheme at the end of 2024 and in 2025, and results from Netflix’s rules against sharing passwords must be encouraging to a company like Disney which still has not turned a profit from its streaming services.