Recent reports indicate that Disney is currently conducting experiments similar to Netflix in one of its markets, which suggests that the company’s Disney Plus service might be the next to take action against password sharing.
Disney Plus Hotstar, is reportedly planning to curb password sharing by limiting premium users to four devices and cheaper plan users to two devices, according to anonymous sources cited by Reuters.
Although the official launch is scheduled later this year, the trials have already begun. This move comes in the wake of Netflix’s similar attempt to combat password sharing, which surprisingly led to increased subscriber numbers as households opted to add more accounts.
The move could potentially address some financial struggles for Disney’s direct-to-consumer business, which includes Disney Plus and Disney Plus Hotstar. The segment reported an operating loss of $700,000 in the second quarter, only slightly narrower than the previous year, with subscriber growth showing a marked slowdown compared to its initial rapid expansion.
Disney Plus Hotstar currently boasts 52.9 million subscribers across various regions, but it faced customer losses in the second quarter. The service generates an average revenue per user of $6.47 for core Disney Plus, but only 59 cents for Disney Plus Hotstar. By curbing password sharing, Disney may seek to boost signups, though it faces challenges given that Netflix has already established itself as an essential service with strong customer loyalty.
Furthermore, Disney Plus has experienced declining enthusiasm, even for highly anticipated projects from Marvel and Disney. For instance, Marvel’s “Secret Invasion” received criticism for its lackluster ending, despite the building excitement for the second season of “Loki.”
While this move by Disney may be an attempt to bolster its revenue and address financial challenges, it remains to be seen how customers will respond.
