Warner Bros. Discovery’s streaming service Max, formerly HBO Max, has announced plans to make password sharing mandatory starting this year in a bid to maximise profits and deal with shareholder pressure.
According to reports confirmed by Yahoo Finance, the move follows a trend in the streaming industry, where platforms are aiming to curb the widespread practice of users verifying account letters to their friends and relatives.
Following in Netflix’s footsteps, Warner Bros. Discovery aims to implement restrictions on password sharing, initially targeting users in the United States, with widespread adoption expected in 2025.
J. B. Perrett, head of worldwide streaming and games at Warner Bros. and Discovery, stressed the importance of this strategy at Morgan Stanley’s media and telecommunications conference.
While Perrett acknowledged that Netflix has had success in reducing password sharing, he pointed to the short time that Warner Bros. has been in the business of password sharing. Discovery stays in the market with untapped potential for growth through private subscriptions.
Disney has also joined the fray, announcing similar moves for its streaming platforms, Disney+ and Hulu, in response to reports of slowing subscriber growth and rising churn rates in the industry.
The decision to crack down on password sharing comes amid challenges to maintaining subscriber growth, with luxury subscribers expected to slow sharply by 2023, according to subscription analytics platform Antena.
Despite industry-wide challenges, Warner Bros. Discovery has achieved a milestone in 2023 with a full year of profitability from its streaming business, a feat previously only accomplished by Netflix.
Suppressing password sharing represents a strategy Warner Bros. is using. Discovery has done to protect its profitability and pave the way for sustainable growth in a fiercely competitive streaming environment.
As the streaming industry continues to evolve, Warner Bros. Discovery’s Max is ready to take on the challenges as he takes advantage of emerging opportunities to redefine the future of entertainment distribution.
Why is Warner Bros. Discovery’s Max streaming service prohibiting password sharing?
Warner Bros. Discovery aims to protect its profitability and respond to shareholder pressure by curbing the widespread practice of password sharing, which impacts revenue streams.
How will the password-sharing crackdown affect users of Warner Bros. Discovery’s Max service?
Users may face sanctions and enforcement measures aimed at preventing unauthorized sharing of account credentials, potentially requiring each individual to have their own subscription.
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