Disney+ Hotstar plans to limit password sharing by considering a policy shift similar to Netflix
Disney+ Hotstar, a leading Indian OTT player, is mulling over imposing limitations on password sharing, similar to the approach taken by Netflix. This move would limit its premium users to connecting only up to four devices.
The Disney+ Hotstar’s Device Policy
Despite the official Disney+ Hotstar website policy limiting premium plan users to four devices, the company internally accommodates connections from up to ten devices. Since only 5% of premium users are connected to more than four devices, Hotstar has refrained from taking severe action to prevent disruption to its premium users.
Disney had initially anticipated that not rigidly enforcing the four-device login policy would draw in subscribers who might initially use shared passwords but would ultimately purchase their accounts.
However, the lenient approach to password sharing didn’t go as planned, but implementing these restrictions could encourage users to buy subscriptions. Likewise, these restrictions would also be applied to the lower-tier plans, limiting viewership to just two devices.
Disney’s Q2 Performance Shows Revenue Growth and Subscriber Loss
The Walt Disney Company reported revenue of $21,815 million, a 13% rise from the $19,249 million earned during the same quarter in the previous year.
Despite this increase in revenue, the company experienced a significant drop in its subscriber count in Q2. Disney+ Hotstar saw a decrease of 4.6 million subscribers in the second quarter of FY23, reducing the total subscriber base to 52.9 million on April 1, 2023, down from 57.5 million as of December 31, 2022. The primary cause of this downturn is the loss of IPL rights to Jio.
This follows a previous decline in the subscriber base of Disney+ Hotstar during the October-December 2022 quarter (Q1 FY23) when it fell to 57.5 million from 61.3 million.
Earlier, in 2023, The Walt Disney Company decided to let go of 7000 employees, a move they claimed would help cut costs by $5.5 billion.
How Password-Sharing Restrictions Boosted Netflix’s Subscriber Base
Netflix ended its password-sharing feature by enforcing its Household concept, thus restricting its users from sharing their accounts. A Netflix Household is defined as all the Netflix devices connected to the internet at your primary viewing location.
During its Q2 2023 earnings announcement, Netflix reported a surge of nearly 6 million subscribers. This uptick followed the company’s decision to enforce password-sharing restrictions for accounts in the US, UK, and over 100 other countries starting in May. The policy is believed to have directly contributed to the substantial increase in new subscribers for the second quarter of 2023.
This article is based on an interview given to Reuters by anonymous sources from Disney+ Hotstar. We are awaiting an official announcement on this matter soon.
Ragul Thangavel
With over nine years of diverse professional experience, Ragul has made significant contributions across various domains, including Media Operations, OTT Technologies, Video Production, Ecommerce, and Social Media.
Holding an Engineering degree, Ragul's career took an unconventional turn when he discovered his passion for writing, leading him to begin his journey as a content writer.
His career has been exclusively dedicated to the growth and development of startups, where he has played a pivotal role. His unique blend of technical knowledge and creative prowess has enabled him to drive innovation and success in every venture he has been a part of.