Disney’s password-sharing crackdown is “working out well” for streaming subscriber growth, chief financial officer Hugh Johnston told UBS’ Media and Communications Conference on Monday.
“That’s going to be a big driver,” he added, noting that the benefits of the paid sharing initiative should start showing up in the beginning of 2025, with it being “incrementally stronger” in each subsequent quarter.
Disney officially launched its password-sharing crackdown in the U.S., Canada, Costa Rica, Guatemala, Europe and the Asia-Pacific region in September after rolling out in select markets over the summer.
Account holders looking to add someone outside of their household to their Disney+ subscription will have to pay an additional $6.99 per month for basic plans and $9.99 per month for premium plans in order to do so. Only one extra member slot is available per account, and the feature is currently unavailable for Disney’s bundle subscribers or subscribers billed through its partners.
In the fourth quarter of 2024, Disney reported a total of 236.2 million subscribers across Disney+, Hulu and ESPN+, up nearly 3% from 229.8 million in the third quarter of 2024. Disney+ accounted for 158.6 million of the total subscribers.
In addition to paid sharing, Johnston said that ad monetization continues to be a growth driver. During the company’s third quarter earnings call, CEO Bob Iger revealed around 60% of new streaming subscribers are purchasing ad-supported plans, including 37% in the U.S. and 30% globally.
“This is something where, relative to our streaming competitors, we’ve got an awful lot of experience with advertising monetization,” Johnston added. “We’ve built our own ad engines, and we’ve got a tech stack that basically the second to none. And as a result, we’re able to deliver audience like basically nobody else can.”
Additionally, Johnston said Disney would “clearly” also look for opportunities to increase pricing, which it most recently did in October. It will also spend $24 billion on content in fiscal 2025, up from $23.4 billion in 2024.
“I think for the most part, that’s a good number. The one place you might see it escalate a little bit — not in the near term, but over the course of the next couple years — is international streaming. Because there’s an opportunity, I think, to create some local programming that would help grow the subscriber base in that business even more,” he said. “It’s not going to be disruptive to anything that we’ve shared with all of you, but I look at international on the streaming side as a good incremental opportunity for us at a relatively high margin.”
While Disney+ recently launched an ESPN+ tile within the platform, Johnston said it was too early to speak to the offering’s benefit, but said he sees it as “an objector to churn” for the streamer.
The company is also planning to launch a fully direct to consumer version of ESPN in early fall 2025, which is expected to be a “much more sophisticated product,” Johnston said.
“That product is going to be about much more interaction. It’s really not going be just an analog product delivered digitally, but it will be a true digital, native type of product,” he said. “So if you want to do ESPN betting through ESPN bet, you’ll be able to do it on the app. If you want to do fantasy tracking, you’ll be able to do it through ESPN+, if you want to do e-commerce connected to sports, the opportunities will be there to do that. And there’s a whole variety of other product features that we’re working on right now that you’ll see in a few months.”
