- Disney will start cracking down on password-sharing in June, with a full rollout in September.
- Iger talked in more detail about it after Disney previously announced in Feburary a plan to cut down on the practice.
- It's one of several strategies Iger is employing as he looks to increase engagement and streaming margins.
Listen up, Disney+ freeloaders — your password-sharing days are numbered.
After announcing Disney's plan to crack down on password-sharing in February, CEO Bob Iger finally set the date in a CNBC interview on Thursday. The new rules will prohibit accounts from sharing subscriptions outside the household and may terminate accounts suspected of doing so.
"In June, we'll be launching our first real foray into password-sharing, just a few countries in a few markets," Iger said in the interview. "But then it will grow significantly with a full rollout in September."
Disney did not respond to inquiries about the exact dates in June and September.
The new password-sharing terms started getting introduced to existing accounts on March 14, but new subscribers have been subject to the password-sharing rules since January 25. The change in terms of service laid the groundwork for Disney to soon take action.
The crackdown on password-sharing comes as the company has tried to cut down on its streaming losses, which Iger said were about $4 billion a year when he returned as CEO. Iger said the company was chasing subscription growth and not as focused as it needed to be on the bottom line.
"It was clear that was not sustainable and not acceptable," Iger said in the CNBC interview.
Iger reiterated in the interview that Disney expects its streaming business to be profitable in its fiscal fourth quarter later this year, which is a "huge, huge improvement," after experiencing over $130 million in losses last quarter.
In addition to cracking down on password-sharing, Iger said Disney plans to make a number of improvements to increase engagement and cut down on marketing costs. Some of these include getting to know the customer better, programming more smartly outside the US, and utilizing technology for tools like recommendation engines, the CEO said.
Eventually, the company hopes to reach double-digit margins in streaming, Iger said. Although many of its upcoming changes echo Netflix's strategy, the CEO said it was premature to say whether it will reach the same margins.
"Netflix is the gold standard in streaming," Iger said. "They've done a phenomenal job in a lot of different directions."
"If we could only accomplish what they've accomplished that would be great," Iger added.
Netflix's crackdown on passwords started last year and was successful in adding about 30 million subscribers in 2023. Since then, other streaming services have announced similar efforts, such as Hulu and Max.