5 Key Lessons Disney Can Take From Netflix

Disney CEO Bob Iger announced on a recent earnings call that Disney+ will begin its much-anticipated password crackdown starting in September.

Password sharing has long been a problem for streaming services. For over a decade, subscribers shared their login credentials with friends and family without facing any repercussions. This practice often allowed people to spread the cost of multiple services within a group, helping them save substantial amounts annually.

However, advancements in technology and the growing influence of streaming platforms are now changing the landscape.

Last year, Netflix initiated its password-sharing crackdown in the United States, yielding promising results. A report from Bloomsburg Intelligence earlier this year suggested that such a crackdown could generate an estimated $4 billion for Netflix by fiscal 2026.

Disney, however, has an edge in this endeavor: Netflix has already laid out a successful model for implementing this potentially unpopular policy. Here are some pivotal lessons from Netflix’s approach that Disney should heed:

Before introducing its password-sharing crackdown in the U.S., Netflix tested the concept in smaller markets. This allowed Netflix to identify and fix any issues before launching it to a broader audience. It’s a wise strategy because even minor glitches can tarnish the rollout and shift the narrative from potential subscriber gains to perceived incompetence.

Instead of forcing people who shared passwords to buy a full-price new subscription, Netflix allowed them to subscribe at a discounted rate of $7.99 per month. This approach provided significant savings compared to a standard subscription and encouraged compliance.

When Netflix implemented its password crackdown, users had immediate concerns. For instance, would a child in college be flagged for using the account, or would someone on vacation be denied access due to being in a different location? Netflix quickly addressed these and other questions through an FAQ page, ensuring users understood what was permitted. Disney should prepare a similar resource and be ready to update it as new questions arise.

Disney+ has faced criticism for some of its recent Marvel and Star Wars shows. For example, “Echo” and “Secret Invasion” received the lowest-ever ratings for Marvel shows on Rotten Tomatoes, and “Star Wars: The Acolyte” garnered a poor 4/10 on IMDb.

Streamers occasionally miss the mark, but it’s challenging to attract new subscribers when the content isn’t compelling. Disney needs to refine its content strategy, focusing on fewer but higher-quality shows that can entice password sharers to become paying subscribers. Netflix exemplifies this approach, often delaying releases to ensure top-notch content, as seen with “Stranger Things” and “Bridgerton.”

After cracking down on password sharing, Netflix experienced a surge in subscriptions, and it didn’t shy away from promoting this success. Publicizing such gains can encourage more people to follow suit. Disney should adopt a similar approach, celebrating early successes and being transparent with numbers when appropriate.

As Disney gears up for its password-sharing crackdown, it has a valuable playbook to follow, thanks to Netflix’s pioneering efforts. By learning from Netflix’s experience, Disney could successfully implement this strategy, ensuring both subscriber growth and enhanced revenue.

Source: Forbes