Here's When Disney Plus Password-Sharing Crackdown Begins And Why Disney Is Doing It

Disney has already said its password-sharing crackdown for Disney+ will begin this summer, and now we know more about when. CEO Bob Iger told CNBC that the company's first push to crack down on password-sharing will begin in June. The effort will start small in a few unspecified places and grow to more countries and markets before the end of 2024.

"In June, we'll be launching our first real foray into password-sharing [crackdown], in just a countries and few markets, but then it will grow significantly with a full rollout in September," Iger said.

When the crackdown begins, Disney+ members will be able to pay an additional fee to provide access to those outside their home, which is also how it works with Netflix. Similarly, Netflix launched its own password-sharing crackdown in a few smaller markets before expanding it to the US and other parts of the world. Iger told CNBC that Netflix is the "gold standard" in the streaming business, so it's not a big surprise to see Disney take from Netflix's playbook.

Netflix's own crackdown on password-sharing led to a huge growth in subscribers for the streaming company. Disney is looking to do the same to help make its streaming business more profitable and on a stronger growth trajectory.

Iger told CNBC that Disney lost more money than it expected with the rollout of Disney+ because the company was focused more on growing subscribers than on making the service actually profitable. When Iger returned to Disney as CEO, replacing Bob Chapek, the company's streaming losses were around $4 billion per year. "It was clear that was not sustainable, and not acceptable," he said.

After returning to Disney, Iger said he wanted to make Disney's streaming business profitable with the aim of turning a profit later this year. He pointed out that for Disney's latest quarter, its streaming business lost around $130 million, which was a significant improvement from the prior losses.

After Disney's streaming business becomes profitable, if it indeed does, Iger said the next objective will be to make it into a growing business. To that end, Iger said he and the team have identified areas to improve its streaming business to make it a higher-margin and growing business. The company needs more engagement, Iger said, and it will attempt to achieve this with things like the recent launch of Hulu within Disney+. The idea, Iger said, is that now that Hulu content is available within the Disney+ app, people may stay on the platform longer because there are more shows to watch and for the algorithm to recommend to users.

Disney+ and Disney's other streaming services also need better recommendation engines, Iger said, so people are constantly directed to stay on the platform and keep watching. He also said Disney will reduce the costs of marketing and customer acquisition, and create programming "more smartly," particularly outside the United States.

All of these things, combined with an effort to crack down on password-sharing, should help Disney+ and Disney's other streaming services become profitable and grow, Iger said.