Walt Disney’s (DIS) streaming division, Disney+, has finally disclosed the details of its long-awaited plan to curb password sharing. The company has officially introduced a new “paid sharing” feature in the United States, Europe, Asia-Pacific, and other regions. With this move, DIS aims to boost streaming revenue by encouraging users to subscribe to individual plans.
It’s important to note that users may find it challenging to avoid Disney’s crackdown. This is because the company will consider various factors, such as subscription activity, linked devices, and internet connection, to identify a user’s household. If the platform detects that a user is watching from outside their household, it may ask the user to confirm their location.
Importantly, Disney+ is the latest streaming platform to join Netflix (NFLX) in cracking down on password-sharing. Netflix’s efforts last year led to a boost in subscriber numbers, reflecting the potential financial benefits of such restrictions. Meanwhile, Warner Bros. Discovery’s (WBD) Max also plans to limit account sharing later this year, aiming to boost revenue and curb unauthorized access.
Disney Reveals Paid Sharing Options
With this background on restrictions regarding password sharing, let’s take a look at the two options Disney has outlined for users who want to continue sharing their accounts:
- Add an Extra Member: For users on the Basic tier, adding an extra member outside their household will incur an additional monthly fee of $6.99. For Premium-tier subscribers, the fee increases to $9.99. Interestingly, each account can only accommodate one extra member.
- Transfer Profile: Those who have been using someone else’s account can transfer their profile and watch history to a new account by signing up for their own subscription.
DIS Makes Efforts to Improve Profitability
Beyond password sharing, Disney is taking several other strategic measures to enhance its financial performance. This includes increasing prices for its two subscription plans starting in October. The cost of the ad-supported Basic tier will increase from $7.99 to $9.99, while the ad-free tier will go from $13.99 to $15.99.
Additionally, the company is cutting approximately 300 jobs across its legal, human resources, finance, and communications departments as part of its cost-reduction strategy.
Is Disney a Good Stock to Buy?
Turning to Wall Street, DIS has a Strong Buy consensus rating based on 18 Buys and four Holds assigned in the last three months. At $117.65, the average Walt Disney price target implies 25.27% upside potential. Shares of the company have gained about 4.5% year-to-date.
