Customers of the Disney-owned streaming service were notified by email on Wednesday of a revised subscription agreement that clearly forbids sharing accounts with others who are not residents of the user’s household.
The revised agreement said, “You may not share your subscription outside of your household, unless otherwise permitted by your Service Tier.” “‘Household’ means the collection of devices associated with your primary personal residence that are used by the individuals who reside therein.” The terms of the updated contract, dated January 25, will go into force on March 14.
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Disney+ Subscription Changes: Stricter Account-Sharing Policies
“We may, in our sole discretion, analyse the use of your account to determine compliance with this Agreement,” it continues to say. “If we determine, in our sole discretion, 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.”
Similar language can be seen in the late-2017 Disney+ subscriber agreement to the changes made to the Hulu agreement. At the company’s August earnings call—which Hulu and Disney+ followed—Disney CEO Bob Iger alluded to the company’s intention to crack down on password and account sharing.
At the time, Iger said, “We will roll out tactics to drive monetization sometime in 2024.” “We’re actively exploring ways to address account sharing and the best options for paying subscribers to share their accounts with friends and family,” he said.
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It also happens to be in line with Netflix’s announcement that it had added 22 million new members in two consecutive quarters, which it credits to its successful campaign against password sharing. Owing to Netflix’s apparent commercial success, competitors have started using similar strategies, keeping a close eye on password-sharing users and nudge them towards subscribing—possibly to the less expensive ad-supported tier.
Hulu, a popular streaming service known for shows like “The Handmaid’s Tale” and “The Great,” is the most current to employ anti-password measures. After experiencing its first subscriber loss in more than a decade in 2022, Netflix began pursuing illegal account sharing in the US in May 2023. Prior to this, the company had long ignored the practice.
Despite the backlash from subscribers at the time, Netflix has managed to attract more paying customers, with over 30 million signing up by 2023. Other streaming services have already followed Netflix’s lead after Disney CEO Bob Iger issued a warning to investors in August about Disney+’s intention to take action against the “significant” number of users who exchanged passwords.
Disney CEO Bob Iger Concerning Shared Passwords Issues a Warning
The entertainment giant began restricting the practice at the end of the previous year, and as a result, a disclaimer against password exchange has been included to Disney+’s amended terms of service.
Hulu did not respond right away when Business Insider contacted it for comment outside of regular business hours. Hence, it was a matter of time until the other big streaming services did the same, particularly as it was clear that the shutdown was not harming Netflix but rather driving more people to subscribe to its more profitable ad-supported programme.
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The news was made the same week that Amazon began charging extra to remove the adverts from its formerly ad-free Prime Video programme. The UK will see a similar change on February 5 of next week. That is in the US.
That is also a sign of a significant change in the leading streaming services, which were once a more attractive alternative to cable because of their lower prices, absence of ads, and ease of sharing. Hulu might be the newest service to implement restrictions against sharing, but it won’t be the final one. The industry feels that in this crowded market, account sharing is a significant impediment to the growth that shareholders are wanting.
