Why is Disney+ Introducing Password-Sharing Rules Now?
Earlier this week, Disney+ announced plans to introduce rules against account sharing in Canada.
It had to happen sooner or later, and the time has arrived. Earlier this week, Disney+ subscribers in Canada began receiving notifications from the service that their user agreement was being updated to specify that accounts are to be used only in a single household.
That means that as of Nov. 1, 2023, Canadian Disney+ users will no longer be permitted to share their Disney+ login information with someone living outside their home. There were no immediate details on just how Disney would be stopping users from sharing passwords, just a notification that the service is “implementing restrictions on your ability to share your account or login credentials outside of your household.”
Disney+ Is Following Netflix’s Example With Password-Sharing Crackdown
The timing of this move is far from accidental. Disney+ is following the Netflix playbook of how to introduce password-sharing restrictions for users almost to the letter. That company also made its users aware that restrictions against password sharing were coming long before they were actually enacted, and like Disney+ Netflix chose to enforce such rules in Canada several months before introducing them in the United States.
During Disney’s most recent earnings report, CEO Bob Iger told analysts that password-sharing restrictions would be coming to Disney+ in 2024. By introducing those rules for Canadian customers now, Disney now has time to study the effects on churn, and to see which plan is attracting the most users who were formerly accessing someone else’s account before rolling out password-sharing rules in the U.S. Once again, it’s the same tactics Netflix used to test the waters, and both companies view their Canadian and American audiences as highly similar.
The results for Netflix have been everything the company could have hoped for thus far. The service saw a big bump in subscribers when it forced former sharers to fend for themselves, and Disney+ may be able to expect a similar increase. The only hiccup (if it can be called so) for Netflix thus far is the fact that most new users are opting for ad-free plans, instead of the cheaper Standard with Ads tier that allows the service to collect more money per subscriber.
It’s likely that Disney won’t have to deal with that issue, at least not to the extent that Netflix has. Disney+ is already signing up much higher percentages of new users to its ad plan than Netflix is. Disney+ is also far younger than Netflix, so users have not had time to internalize the belief that the service is best enjoyed without ads, as so many Netflix viewers have.
Disney+ is just hopping on this trend early; it’s likely that all streaming services will move to restrict password sharing now that Netflix has shown users won’t respond with high churn rates. Disney is rolling out rules against account sharing in Canada now so it has the time and information needed to fully plan its strategy for introducing those rules in the U.S. and other global territories.
Disney+
Disney+ is a video streaming service with over 13,000 series and films from Disney, Pixar, Marvel, Star Wars, National Geographic, The Muppets, and more. It is available in 61 countries and 21 languages. It is notable for its popular original series like “The Mandalorian,” “Ms. Marvel,” “Loki,” “Obi-Wan Kenobi,” and “Andor.”