Disney Plus is following in the footsteps of Netflix by cracking down on password sharing. And the restriction is starting soon — Nov. 1 in Canada.
The streaming service reportedly sent emails to Canadian subscribers on Sept. 27 detailing new rules around password sharing. According to The Verge, the note said, "We’re implementing restrictions on your ability to share your account or login credentials outside of your household."
Last month, Disney CEO Bob Iger told investors that the company planned to enact something similar to Netflix'x password sharing crackdown, which rolled out in late spring. Now, if you have a Standard plan, Netflix charges $8 to add one extra person who can use the service outside the primary household. Premium plan subscribers get two extra people for free; the cheaper ad-supported tier doesn't allow any extra users.
It's unclear if Disney Plus will also establish a fee structure like Netflix or simply not permit password sharing at all. A new section of the Canadian subscriber agreement only notes that accounts could be shut off if the rule is broken. Disney Plus, like Netflix, can monitor sign-ins and IP addresses.
“Unless otherwise permitted by your Service Tier, you may not share your subscription outside of your household,” the terms read. "If we determine that you have violated this Agreement, we may limit or terminate access to the Service and/or take any other steps as permitted by this Agreement.”
While the password-sharing crackdown is currently only in place in Canada, we expect to see it roll out to the U.S., U.K. and other countries soon.
Password-sharing crackdowns work
Cutting the cord was supposed to be cheaper than cable, yet streaming costs are rising. The industry has run into trouble in the last couple of years, as subscriber growth has slowed and investors have demanded actual revenues. Netflix, Disney, Amazon and other media companies are now instituting multiple ways to make their streaming services profitable.
Disney Plus is instituting a price hike on October 12, with the ad-free tier increasing in price from $10.99 a month to $13.99 (the annual plan is going up from $109.99 to $139.99). Corporate sibling Hulu is also raising the rate on its ad-free tier, from $14.99 to $17.99. Disney Plus also introduced an ad-supported tier late last year and the next step is limiting account sharing.
While Netflix's password-sharing crackdown generated a ton of complaints, it does seem to be working. The company reported a gain of 6 million subscribers following the move and a modest boost in revenues.
Similarly, Disney is likely hoping to turn some of the account moochers into new subscribers. If a new user opts for the less expensive ad-supported plan, Disney gets two sources of revenue in one. It's a win for them — but not so much for all the people who wanted to stream Loki season 2 with their parent's account.