Disney’s CEO Bob Iger recently announced that the company’s first push to crack down on password-sharing for Disney+ will begin in June. This effort will initially start in a few select countries and markets and will eventually grow to more countries and markets by the end of 2024. This move is part of Disney’s strategy to make its streaming business more profitable and on a stronger growth trajectory.
Disney+ taking cues from Netflix’s playbook is not surprising, as Netflix is considered the “gold standard” in the streaming business. Netflix itself launched a password-sharing crackdown in smaller markets before expanding it to the US and other parts of the world. The crackdown led to significant growth in subscribers for Netflix, and Disney hopes to achieve similar results by implementing a similar strategy.
Upon returning as CEO of Disney, Bob Iger realized that the company was losing more money than anticipated due to the focus on subscriber growth over profitability. The streaming business was racking up losses of around $4 billion per year, which prompted Iger to make changes. Under his leadership, Disney is aiming to make its streaming business profitable by the end of the year. The recent quarter showed improvements, with streaming losses reduced to around $130 million.
To make Disney’s streaming business more lucrative, Iger and his team are working on enhancing engagement and recommendation engines. The recent integration of Hulu within Disney+ aims to keep viewers on the platform longer by offering a wider range of content and personalized recommendations. Additionally, Disney plans to reduce marketing costs, improve customer acquisition strategies, and create programming tailored to audiences, especially outside the US.
Once Disney’s streaming business becomes profitable, the next goal is to turn it into a growing business. Iger highlighted the importance of identifying areas for improvement to ensure higher margins and sustained growth. By cracking down on password-sharing, enhancing engagement, implementing better recommendation engines, and optimizing costs, Disney aims to establish Disney+ and its other streaming services as profitable entities.
Disney’s upcoming password-sharing crackdown is just the first step in its larger strategy to make its streaming business a profitable and growing venture. By learning from industry leaders like Netflix and focusing on enhancing user experience and content recommendations, Disney is positioning itself for success in the competitive streaming market. With careful planning and strategic investments, Disney’s streaming services have the potential to become significant players in the industry.
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