It's official: Streaming's password-sharing crackdown will hit Hulu users next.
Disney (DIS), which fully owns the platform after purchasing Comcast's (CMCSA) minority stake late last year, announced updates to its Hulu subscriber agreements and added additional terms to its sharing policies. The changes will go into effect on March 14.
"We're adding limitations on sharing your account outside of your household, and explaining how we may assess your compliance with these limitations," the company wrote in a note to subscribers on Wednesday.
Disney CEO Bob Iger, who previously said the number of subscribers sharing accounts is "significant," first revealed the company will address password sharing during its fiscal third quarter earnings call in August.
The rollout echoes the strategy of Netflix, which began implementing its password-sharing crackdown for US subscribers in May after first announcing the initiative in October 2022.
It's a classic tale of follow-the-leader as Netflix remains the only consistently profitable streaming service and others in the industry attempt to catch up.
Third Bridge analyst Jamie Lumley previously told Yahoo Finance all of the major streamers had been weighing password crackdowns for well over a year but wanted to wait and see what Netflix would do first.
So far, so good, with Netflix reporting consistently strong results since the rollout first began. Last week, the company saw subscriber additions top 13 million as Wall Street championed the report.
"Right now, a lot of these studios and streamers are seeing that this initiative can work, and it can drive growth in what has been a saturated and stagnant market domestically," Lumley said.
In the face of Netflix's success, Disney's timing makes sense — especially as the media giant seeks to reach its target of achieving streaming profitability by the end of fiscal 2024.
Streaming losses for the media giant narrowed to $387 million in its fiscal fourth quarter results, down from a loss of $1.41 billion in the prior-year period after the company raised prices on two separate occasions last year, upping the monthly price of its ad-free Disney+ and Hulu plans by more than 20%.
Disney stock is up about 6% year to date compared to the S&P 500's (^GSPC) 2% gain over that same period. The company will report earnings on Feb. 7.
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at [email protected].
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