Entertainment giant Walt Disney Co. (DIS) is charging users extra money to share their passwords on the company’s main streaming platform.
Disney said that, going forward, users of its Disney+ streaming service will be charged an additional $6.99 per month to add an “extra member” to its advertising-supported tier, and $9.99 monthly to add a person to its ad-free plan.
The company said the extra fee will enable users to share their subscription with a friend or family member outside their household. This option only applies to the flagship Disney+ streaming service. It does not include Disney’s other streaming platforms such as Hulu and ESPN+ that’s focused on sports.
Disney’s Efforts to Make Streaming Profitable
The new fees come as Disney focuses on making its streaming platforms more profitable. Disney’s streaming segment, which includes Disney+, Hulu and ESPN+, turned a profit for the first time during the company’s Fiscal third quarter that was reported in August of this year.
The combined streaming platforms earned a profit of $47 million in Fiscal Q3. That was a significant improvement over a loss of $512 million a year earlier. Management at Disney is pushing for profitability in streaming as the company’s traditional TV business that includes the ABC network loses customers and advertising dollars.
Making streaming profitable took on added urgency at Disney following a costly strike last year by Hollywood actors and writers. The company’s Disney+ streaming service saw its subscriptions grow 1% to 118.3 million in Fiscal Q3. Other streaming services, including Netflix (NFLX), have also cracked down on password sharing and are charging extra money for shared accounts.
Is DIS Stock a Buy?
Walt Disney’s stock has a consensus rating of Strong Buy among 22 Wall Street analysts. That rating is based on 18 Buy and four Hold recommendations assigned in the last three months. There are no Sell ratings on the stock currently. The average price target on DIS stock of $117.65 implies 22.46% upside potential from current levels.
