Disney+ to Crack Down on Password Sharing NEXT MONTH

Back in early August, Disney held its third-quarter earnings call. During the call, a lot of the focus was put on Disney’s streaming service, Disney+. Disney launched Disney+ just a few months before the COVID-19 pandemic shut down the world. Because of that, the platform experienced some early success. Unfortunately, that success was relatively short-lived, and Disney+ has become a money pit for the House of Mouse.

Each quarter, Disney+ loses millions of subscribers and hundreds of millions of dollars. In just four years, Disney has reportedly lost approximately $11 billion on Disney+.

When Bob Iger stepped back into the CEO role in November 2022, one of the first tasks he gave himself was to cut $5.5 billion from Disney’s budget. That heavily affected Disney+, which had a number of shows canceled. The budgets were cut for the shows that remained. Iger also said that Disney was going to start cracking down on password sharing — following in the role of its biggest competitor, Netflix.

Related: ANOTHER Price Increase Coming to Disney+

Iger did not say when the crackdown would begin but said it would start later this year. Later is now here.

According to reports, Disney+ will start restricting its password sharing with subscribers who live in Canada. The restrictions will go into place beginning November 1, but Disney has not said how they will restrict the sharing of passwords.

Per The Verge:

The company announced the change in an email sent to Canadian subscribers. Disney has not provided many details on how it plans to enforce this policy — its email merely states that “we’re implementing restrictions on your ability to share your account or login credentials outside of your household.” The announcement reads more like a strong finger wag than anything else. “You may not share your subscription outside of your household,” reads the company’s updated Help Center.

A new “account sharing” section in the Canadian subscriber agreement also notes that the company may “analyze the use of your account” and that failing to comply with the agreement could lead to account limits or termination.

Mr. Iger has also indicated that password-sharing restrictions will be set up for US subscribers. He said that it should take place sometime in 2024, but said that the changes might not be complete at the end of 2024.

Disney+ Legal Troubles

Losing hundreds of millions of dollars and millions of subscribers is not the only problem Disney is facing when it comes to Disney+. The company is also dealing with legal trouble caused by now-fired CEO Bob Chapek.

Related: Bob Chapek Calls Being Disney CEO “Three Years of Hell”

For the three years that Chapek was in charge, he was frequently touting the success of Disney+. He repeatedly said that Disney+, despite some setbacks, was set to be profitable by 2024. He also boasted about the number of subscribers Disney+ had and how much those subscribers loved the service.

But he is being accused of lying about it all.

In May 2023, a group of investors filed a lawsuit against Chapek, former Disney CFO Christine McCarthy, and Chapek’s former right-hand man, Kareem Daniel. The investors claimed that Chapek, McCarthy, and Daniel had “repeatedly misled investors about the success of the Disney+ platform.” Investors claimed that Chapek lied about the true cost of Disney+, how much it would cost to maintain subscriber growth, and that the platform would indeed be successful by 2024.

Related: McCarthy Battled With Iger Before Exiting as Disney CFO

Then, in late August, a second lawsuit was filed against Chapek. However, this time, Disney was also included in the lawsuit. The lawsuit claimed that Disney and Chapek were part of a “cost-shifting scheme” that was created specifically to defraud investors.

The second lawsuit claims that Disney purposefully interfered in a deal between TSG Entertainment Finance and 20th Century Fox. Disney allegedly interfered because they own 20th Century Fox. They wanted to use 20th Century to “prop up” Disney+. That, in turn, would drive up Disney’s stock value. Kareem Daniel and Christine McCarthy were also named in the second lawsuit.

Disney has not commented on either suit.