Disney’s CEO, Bob Iger, openly admired streaming rival Netflix (NASDAQ:NFLX) during Disney’s (NYSE:DIS) second quarter earnings call, particularly praising their recent initiative on password sharing. “We are encouraged by the results that Netflix has shown with their password-sharing initiative, and we believe it will help drive our growth,” Iger stated. He acknowledged Netflix as the benchmark in streaming services, setting a high standard that others aspire to reach.
Iger explained that Disney is developing similar technology to what Netflix has perfected over the past decade to enhance profitability. This begins with a crackdown on password sharing, a policy Netflix started enforcing for U.S. subscribers in May after initially announcing it in October 2022.
Following in Netflix’s footsteps, Warner Bros. Discovery’s (NASDAQ:WBD) Max streaming service is set to impose restrictions on password sharing later this year, with a broader implementation expected by 2025, as confirmed by Yahoo Finance.
Disney plans to start its password sharing crackdown next month in select markets, with a broader, global rollout scheduled for September. Iger highlighted the substantial number of subscribers sharing accounts, which prompted Disney to take action against unauthorized password sharing last year.
“We are beginning to take steps against improper password sharing,” Iger remarked. “We are quite optimistic about the results.”
These measures come as Disney aims for sustained profitability in its streaming operations, an increasingly vital component as its traditional TV business wanes. For the first time, the direct-to-consumer (DTC) section of its entertainment segment, encompassing Disney+ and Hulu, reported a profit. Despite this milestone, Disney anticipates weaker performance in this segment for the coming quarter.
Although Disney’s streaming services were not all profitable in Q2—total DTC losses were reported at $18 million, an improvement from the $659 million loss in the same quarter the previous year—Disney remains confident in achieving full streaming profitability by the end of this fiscal year.
Featured Image: Megapixl ©Szilkov
