You didn’t really think Netflix would be the only streamer to crack down on password sharing, did you?
Disney+ Hotstar in India will begin enforcing its already-existing policy that premium users can log in from no more than four devices simultaneously, according to Reuters. While that’s been the written rule for a while now, in practice the service allowed for as many as 10 users to be logged in at once. The password-sharing crackdown will also apply to the cheaper Disney+ Hotstar plan, where simultaneous usage will soon be limited to two devices.
The plan is to roll out the crackdown later this year; internally, Disney+ Hotstar has already begun testing the enforcement, the report continued. The policy was never strictly enforced in hopes that borrowers would get a taste of the service and ultimately convert to a Disney+ Hotstar account on their own.
The borrowing wasn’t exactly bankrupting Disney. As of April 1, Disney+ Hotstar had 52.9 million subscribers, representing about one-third of the overall Disney+ portfolio. But the Southeast-Asian service’s ARPU, or average revenue per user, was just 59 cents per month from January to March; compare that to $7.14 in the U.S. and Canada.
Reuters reported that only 5 percent of premium subscribers logged in from more than four devices, so we’re talking small potatoes; like, not even fingerlings. Implications, however, could be much larger — maybe Russet.
In the U.S., Disney+ allows for simultaneous streaming across four devices, though in practice, one account can actually be logged in on 10 different devices, and you can download content to all 10. Those numbers look familiar? Yeah, it’s basically the same policy vs. practice setup as Disney+ Hotstar.
So will the reported Hotstar enforcement also come here? Disney+ reps did not respond to our inquiries.
But also… probably.
Last month, IndieWire surveyed a cross-section of experts on which streaming service would be the next to come down hard on password sharing. Disney+ and HBO Max were the frontunners, in that order. Disney+ is still seeking profitability, Max recently turned a surprise profit.
Streaming has very much become a game of follow-the-leader. Every service you subscribe to today followed Netflix into the business and most began with the same subscription-only model. Then there was the great war of the spending sprees, which soon gave way to the inclusion of advertising and the emergence of FAST (free, ad-supported television), and most recently, desperate cost-cutting. When HBO Max began removing and writing off programming, others (including Netflix and Disney+) dove in.
And now, Disney, Max, Wall Street, and everyone else in this industry of parity have a front-row seat to Netflix’s “paid sharing” rollout.
Netflix’s password-sharing crackdown did not begin in the U.S. The company first tested the policy in 2022 in Chile, Costa Rica, Peru, Argentina, the Dominican Republic, El Salvador, Guatemala, and Honduras. In early 2023, it was expanded to Canada, New Zealand, Portugal and Spain. Here, paid sharing was a May rollout; and it was an instant success — from the standpoint of subscriber additions, at least.
Last week, Netflix revealed it added 6 million new users from April to June, many of whom were former borrowers. The resulting revenue has just began to trickle in, but that payoff is coming, Netflix executives said. And it could be a game-changer.
Netflix previously estimated that 100 million people accessed the service from outside of the member household. Monetizing the freeloaders could mean another $3 billion in annual revenue.
Disney+ in the U.S. costs $7.99 per month with ads and $10.99 without ads. The company also offers various bundles with Hulu and ESPN+.
Disney will report its earnings for the June quarter on August 9.
