Max set for password-sharing crackdown as WBD aims to increase streaming profits

Warner Bros. Discovery has announced its plan to implement a paid sharing initiative for its Max streaming service, a move that places it alongside Netflix and Disney+ in efforts to curtail password sharing among users.

Warner Bros. Discovery lost $3.1B in 2023

This initiative is slated to commence later this year with a more extensive rollout planned for 2025, according to JB Perrette, CEO and president of global streaming and games at WBD, during his appearance at Morgan Stanley’s 2024 Technology, Media & Telecom Conference in San Francisco.

The decision to regulate password sharing emerges as WBD reports a significant reduction in its streaming losses, with the fourth quarter of 2023 showing a decrease to $55 million from a previous $217 million loss.

The company transitioned to a profit of $103 million for the year, a notable recovery from a $1.59 billion loss in 2022. With an eye on the future, WBD anticipates its direct-to-consumer (DTC) business to achieve profitability in the latter half of 2024, targeting $1 billion in direct-to-consumer EBITDA by 2025.

The initiative’s announcement coincides with the service’s growth, as WBD’s DTC division, encompassing Max, Discovery+, and traditional HBO cable subscriptions, saw an addition of 1.8 million subscribers, reaching a total of 97.7 million.

This also move mirrors the broader industry trend towards regulating password sharing, with Netflix already implementing a paid sharing initiative in the United States following tests in several other countries.

Netflix views this strategy as integral to its business, enhancing its ability to convert entertainment value into revenue.

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Similarly, Disney has outlined plans to introduce measures for Disney+ accounts suspected of password sharing, offering new capabilities for account holders to include individuals from outside their household for an additional fee.