Disney+ password sharing crackdown raises concerns amid drop in subscribers

A scene from Disney+ Korean original series "Hyper Knife" / Courtesy of Disney+

Disney+ will crack down on password sharing in Korea, following in the footsteps of Netflix. However, the timing of the new policy raises questions, given the platform’s underwhelming performance in the local streaming market.

The streaming service has notified users that, password sharing will be restricted to individuals living in the same household, starting June 24.

Under the revised policy, only those residing at the same address may share an account, and access will be limited to devices associated with the user’s primary residence.

Users who wish to share their account with individuals outside their household will be able to do so by paying an additional monthly fee to add extra members.

Disney+ began restricting password sharing in certain countries last year, introducing paid sharing subscriptions.

The company explained that the crackdown in Korea is part of implementing its account policy change worldwide.

"(Password-sharing restrictions) are already being implemented globally and it is simply Korea's turn in the sequence,” a Disney+ Korea official said.

The move is being cast as part of the streaming company's plans to restrict password sharing worldwide, but as Disney+ struggles to establish itself in the local streaming market, it is raising concerns that it could make more users leave the service faster than they already are.

A scene from Disney+'s "Moving" / Courtesy of Disney+

Launched in 2021 amid high expectations that it could potentially rival Netflix in Korea, Disney+ has rolled out star-studded Korean originals, including Cannes-winning actor Song Kang-ho’s series debut, "Uncle Samsik," and veteran Choi Min-sik’s first small-screen role in decades, "Big Bet."

When popular webtoon creator Kang Full’s original series “Moving” came out in 2023, the platform seemed to finally find its footing with the series’ success. However, the high expectations were short-lived, as they were quickly followed by a string of failures.

The streaming market here is dominated by Netflix with an overwhelming 14.06 million monthly active users as of last month, according to mobile index data from industry tracker IGAWorks. Coupang Play came in second with about 6.82 million, followed by Tving at 6.5 million and Wavve at 4.03 million. Disney+ had 2.33 million users, marking a sharp drop of 2 million from its 2023 figure of 4.33 million.

However, despite the risks, industry officials believe that the move is inevitable as Netflix has already implemented similar global restrictions, setting a precedent for others in the industry to follow.

“When streaming services were expanding, it was important to get people to experience using it as much as possible, which Netflix notably did. But as Netflix's global subscribers increased, it became important to block multiple people using one account to increase revenue … And as user growth isn't as explosive as before in Korea, it's important for other platforms to also block account sharing and make people spend money," an industry official said.

“Since (Disney+) is a global service, they're modifying policies for all global subscribers. It could be part of some premium strategy … Also recently, content production costs and distribution costs have been rising considerably. Cost burden seems to be a factor too."

Disney+ recently unveiled lineups for upcoming Korean originals, slated for the second half of this year, including “Tempest." Although it expressed a commitment to continued investment in the local market, the looming question is whether Disney+ can win back local users or if the latest crackdown will only deepen its troubles in the fiercely competitive streaming market.

Adding to the uncertainty, the much-anticipated series "Knock Off," starring Kim Soo-hyun, was abruptly removed from the lineup amid controversy over accusations that the actor had dated actress Kim Sae-ron when she was a minor.