- Disney+ wants to crack down on password sharing
Starting September, password freeloaders on the streaming service Disney+ will face the music. From then on, Disney plans to crack down on sharing login credentials beyond a single household. The company has already begun taking initial steps, as confirmed by Disney CEO Bob Iger.
Disney hopes that more people will sign up for their own subscriptions if they can't piggyback on the accounts of family members or friends. This strategy has already paid off for Disney's competitor, Netflix.
In the last quarter, Disney's streaming business finally turned a profit after years of losses. The Disney+ division reported an operating profit of $47 million. A year ago, the segment had lost $512 million.
Disney and other Hollywood studios have been engaged in a costly pursuit to catch up with Netflix for years. One reason is the decline in the U.S. cable television business, which used to be a reliable cash cow.
To stem streaming losses, Disney CEO Bob Iger has recently tightened the purse strings on Disney+. This includes producing slightly fewer series and films from the "Star Wars" and Marvel universes. Disney+ ended the quarter with 118.3 million households, a 1% increase from three months prior.
Overall, Disney's entertainment segment reported an operating profit of $1.2 billion, three times higher than the previous year's quarter. This was also boosted by the success of the animated film "Soul 2," which has grossed $1.56 billion so far.
However, in the segment covering Disney's theme parks and cruise ships, operating profit decreased by 3% to $2.22 billion. Disney attributed this to reduced consumer spending towards the end of the quarter and the impact of the Olympics on business in Disneyland Paris. For the current quarter, Disney expects business to be at last year's level. The company's stock fell by over 3% at the start of U.S. trading.
On a corporate level, Disney's quarterly results exceeded market expectations. Revenue increased by 4% to nearly $23.16 billion (€21.21 billion). Analysts had predicted around $23 billion. Net income was $2.6 billion, compared to a loss of $460 million in the previous year's quarter.
Disney is urging password freeloaders to consider subscribing individually, as the company intensifies efforts to enforce its one-household policy on streaming service Disney+. This move follows Disney+'s shift towards minimizing streaming losses, with CEO Bob Iger aiming to boost revenue by producing fewer series and films from popular franchises.
