Disney+ Follows Netflix, Clamps Down on Subscription Sharing Amid Strategic Shifts

Walt Disney Co's DIS Disney+ is tightening its subscription sharing rules, as revealed in a notification to Canadian subscribers. 

Effective November 1, the company will prohibit sharing subscriptions outside of one's household unless permitted by the service tier. Violating these terms may lead to limited or terminated access to the service. 

This move is part of Disney's strategy to monetize account sharing, as announced by CEO Bob Iger. 

The company is exploring ways for paying subscribers to share their accounts legally and plans to introduce measures to monetize this in 2024, Variety reports.

Additionally, Disney+ is launching an ad-supported plan in Canada, the U.K., and eight European countries on November 1, priced at $7.99/month. 

This initiative follows Netflix Inc's NFLX footsteps, introducing a "paid-sharing program" to convert password borrowers into paying subscribers or add them as "extra members." The program significantly boosted Netflix's subscriber numbers.

Furthermore, Disney is increasing the prices of its premium subscription tiers in the U.S. Starting October 1, Disney+ Premium (ad-free) will cost $13.99/month, Hulu without ads will be $17.99/month, and ESPN+ will be $10.99/month, marking increases of $3 and $1 respectively. 

The price hike comes as Disney+ experienced a slight drop in subscribers in the U.S. and Canada, although it saw an overall increase in global subscribers. 

The stricter sharing rules and new pricing are part of Disney's broader strategy to enhance revenue and effectively manage the platform's user base.

Disney is also exploring options for its TV network portfolio, focusing on film studios, theme parks, and streaming. CEO Bob Iger is considering strategic partnerships for ESPN, with the likelihood that its premium sports programming will eventually shift entirely to streaming.

In September, Disney also disclosed plans to double its capital expenditures at its Disney Parks, Experiences, and Products ("DPEP") segment. 

The company sees a capex of $60 billion aggregate over the next decade, including investing in expanding and enhancing domestic and international parks and cruise line capacity.

Price Actions: DIS shares are trading lower by 0.48% at $81.28 premarket on the last check Tuesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.