Max will become the latest streamer to cut down on password sharing, as Discovery Warner Bros. plans to begin its crackdown in late 2024 through 2025.
Speaking at the Morgan Stanley Technology, Media & Telecom Conference, JB Perrette, president and CEO of global streaming and gaming at Warner Bros. Discovery, announced plans to limit password sharing, citing NetflixThe crackdown, which he said was “implemented with great success.” It's all part of WBD's multi-part plan to generate streaming profits.
“We're going to do it starting at the end of this year and into 2025, which is another growth opportunity for us,” Perette said of the crackdown on password sharing.
When asked what revenue opportunity the crackdown on password sharing represents, Perette said it was a “significant opportunity” but was cautious about being “oversold.” considering Netflix's 260 million subscribers and longer history compare to Max's 97.7 million.
“I am conscious not to oversell because we see the success of Netflix. Netflix had been in the market for 17 years. This means people have shared their passwords for 17 years. We've been in the market for four years, if you count the launch of HBO Max, and obviously we're not quite at the same scale. But we believe that, given the scale of our business, this is a significant opportunity.
WBD posted a full year Streaming earnings for 2023, a rarity among Hollywood media conglomerates, but in the fourth quarter, the streaming segment reported a loss of $55 million in adjusted earnings before interest, taxes, depreciation and amortization, compared with a loss of $217 million dollars a year ago. .
The goal is to maintain consistent profit in this segment, something Perette said he can achieve through further globalization, given that 80 percent of the company's revenue is still based in the United States, as well as by expanding the level of advertising, which launched in the United States, Europe and Latin America.
Additionally, he highlighted an improvement in content over the next 18 to 24 months, which includes the second season of Dragon House in June and next year, the second season of The last of us, the second season of Euphoriaand the third season of The White Lotus.
“Unfortunately, we launched Max in the US and in the eight months since, for a variety of reasons – some of which we knew about, some related to the strike – we've launched probably the lightest slate of content we've ever had. have ever had,” he said. said.
While Netflix was the first streamer to adopt a crackdown on passwords, resulting in a push of 13 million new subscribers in the last quarter, Disney also announced that it would begin adopting a password sharing policy.
Disney has already updated its subscription agreement for Disney+, as well as Hulu, prohibiting account sharing for new subscribers starting January 25 and for existing subscribers starting March 14. And last month, Disney CFO Hugh Johnston said that starting this summer, Disney+ account holders will be “presented with new features” that allow account sharers to start their own subscriptions.