Warner Bros. Executive Declares Upcoming Strategy Against Widespread Password Sharing Amounts to Merely Another Fee Increase
Warner Bros. Discovery's streaming platform, Max, is contemplating a password-sharing curb, mimicking strategies employed by Netflix and Disney. This move has been in the works for some time, and the company's executives confirmed the timeline for unveiling this revenue-generating strategy during a recent earnings call. It's important to note that the executives themselves labeled this as more than just a price hike.
During their investors' quarterly results discussion, JB Perrette, President of Global Streaming and Games at WB, initially brought up the company's strategy to curtail password-sharing. Later in the call, Gunnar Wiedenfels mentioned that the media colossus plans to roll out "soft messaging" to secure accounts towards the end of 2024. The objective is to limit password-sharing capabilities through 2025 and extend into 2026.
Much like Disney and Netflix, other companies have been guarded about the messaging surrounding their password-sharing limitations. However, Wiedenfels was forthright about the primary reason behind this move – to generate more income from customers. He explained that the end of password-sharing effectively equates to both a price rise and an additional fee for non-subscribers and multi-household members.
Wiedenfels was enthusiastic about the potential revenue increase this strategy might bring.
In June, Max elevated the price of its ad-free tier by $1 to $17 per month, or $20 more per year, totaling $170. The Ultimate ad-free tier, which enables multiple devices to stream content simultaneously and offers offline viewing options, also escalated to $21 monthly, or $210 annually. This price increase followed a series of pricing increases across various streaming platforms in 2023 and 2024.
Max intends to inform customers of the impending password-sharing crackdown via emails before implementing it. Though the precise mechanisms for limiting accounts remain unclear, the company could adopt Disney's approach of providing extra member accounts for an extra fee of up to $7 a month. Netflix subscribers paying for the Standard or Premium plans can opt for shared access outside the household for an additional $8 per month.
These new revenue-generating plans were revealed as Warner Bros. celebrated an increase in subscribers across both Max and Discovery+. From 103.3 million in June to 110.5 million in the recent update, subscriber numbers have seen a significant surge, with the Paris Summer Olympics contributing to this growth. However, the increase in subscribers does not guarantee loyalty, as CEO David Zaslav, who received a 25% salary hike this year, emphasized the need to improve the company's perceived asset valuations by reducing expenses.
Zaslav expressed his disappointment with the returns on Joker: Folie a Deux and highlighted the importance of consistent content production, which is essential in today's rapidly evolving media landscape.
As Warner Bros. Discovery openly discusses these consumer-unfriendly policies, it's worth taking a moment to reflect on the widespread impact of these lucrative, yet antagonistic practices. A recent Deloitte report suggested that U.S. households are currently shelling out over $61 monthly for multiple streaming services, marking a 27% increase from 2023. This escalation in expenses results from segmented viewing experiences and price hikes, even before Max and Disney+'s latest price revisions. All these adjustments ultimately serve to brighten the grins of shareholders.
The tech industry is witnessing a trend of streaming platforms, including Max, implementing strategies to limit password-sharing to boost revenue in the future. By 2026, Max plans to secure accounts and limit password-sharing capabilities, leveraging technology to generate additional income from customers.
