No platform will allow shared accounts

The missing one: Max follows Netflix and Disney in requiring one household per subscription.

Max, like Netflix and Disney+, will limit shared accounts, as announced over a year ago. Warner Bros. Discovery CEO and President of Global Streaming and Games JB Perrette has even given a date: next week, customers will receive messages about the new service terms.

Next, it will report on “a way to, essentially, add a member” to subscriptions in Q1 2025. He also called it “an art and a science” to determine which Max users are sharing passwords and which are using them for permitted purposes like vacations or business trips.

Perrette predicts: “As we get more data, we’ll figure out our detection capabilities with explicit and implicit signals, and the filters will tighten through 2025. We expect this to boost growth even more when it launches in the second half of 2025 and 2026.” Warner believes this deterrent will improve Max’s finances, which have been cut for years.

This follows other platforms’ price increases, advertising in programming, and account sharing bans. As we said a few months ago, subscriptions may be about to collapse, so all platforms are trying to save as much revenue as possible.

A top exec at Warner Bros. Discovery said Max will start enforcing restrictions on subscribers sharing accounts outside their household this year, following Netflix and Disney.

This week at the 2024 Morgan Stanley Technology, Media & Telecom conference, Warner Bros. Discovery president/CEO of global streaming and games J.B. Perrette announced a Max password sharing crackdown.

Netflix has implemented password sharing crackdowns “very successfully,” Perrette said. That will begin later this year and into ’25, giving us another growth opportunity.”

“I’m conscious of not overselling it,” Perrette said, declining to estimate the move’s upside. He added, “but we think relative the scale of our business it’s a meaningful opportunity.” Max is smaller than Netflix.

Netflix added 29.5 million net new subscribers in 2023, up from 21 million in 2020-22, thanks to its global implementation of “paid sharing,” which encourages users who borrow someone else’s account to sign up for their own plan or have primary account holders add them as a “extra member.”

Disney+, Hulu, and ESPN+ subscribers are also being discouraged from sharing passwords. Disney CFO Hugh Johnston said on the Mouse House’s earnings call last month that Disney+ accounts suspected of “improper sharing will be presented with new capabilities to allow their borrowers to start their own subscriptions” this summer. He said Disney+ account holders can add non-family members for a fee in 2024.

Max’s terms of use, updated Feb. 27, allow Warner Bros. Discovery to “modify access or disable features, including for security reasons, to limit the impact of account sharing outside of your household or where we have concluded in our discretion that your Max Account has been misused.” You must stop using the Platform after suspension or termination.

WBD is monetizing Max password-sharing to boost streaming revenue. The streaming business of Warner Bros. Discovery Max lost over $2 billion in 2022, but its direct-to-consumer business made $103 million in 2023. Perrette says the company wants $1 billion in EBITDA by 2025.

At the Morgan Stanley conference, he said, “We said, we are moving from a world of subs at all cost, which is kind of the narrative that existed in the old media landscape, to a one of profitable growth as our key North Star

Following the February switch to Max in Latin America and the Caribbean, Max will launch in 22 European HBO Max countries this spring to boost Max’s financial trajectory. WBD plans to launch Max ad-supported in over 40 markets by 2024. The company will also “lean into” Verizon’s Max-Netflix discounted bundle and explore similar partnerships, Perrette said.

No platform will allow shared accounts

By knl9j

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