Is This a Desperate Move by Netflix to Keep up With Disney+?

Disney+ was launched in early November and immediately gained over 10 million users on the first day alone. Many people seem to be attracted to the streaming platform for its affordability, ad-free viewing experience, and large database of beloved Disney-owned shows and movies.

With Disney+ clearly a huge competitor in the streaming market at this point, a lot of people are looking to see what Netflix’s next move will be. It recently came out that there is indeed something that the company might be trying to push in the near future.

However, is this really a way for Netflix to compete with Disney+? If so, will it work? Here’s what we know.

Netflix is looking to crack down on password sharing

Netflix logo on a phone screen
Netflix logo | Rafael Henrique/SOPA Images/LightRocket via Getty Images

In late October, the Alliance for Creativity and Entertainment (a coalition of huge entertainment companies like Netflix, Warner Bros., Sony, and Paramount) announced that it has formed a working group to study “improper password sharing” and how to reduce it. While ACE represents multiple companies, Netflix seems to be at the forefront of this news.

It is not clear how many Netflix users share their account with friends and family members, but it has been said that password-sharing could be costing the platform billions of dollars in lost revenue.

In 2016, Netflix’s CEO Reed Hastings said that “password sharing is something you have to learn to live with,” but it seems that the streaming service is now singing a different tune. Speaking to Yahoo recently, Netflix Co-Founder & First Netflix CEO Marc Randolph called password sharing “flagrant abuse.”

For the time being, research and discussions are still going on as to what the best way to limit password sharing is. As reported by Bloomberg, some measures that are being considered include “requiring customers to change their passwords periodically or texting codes to subscribers’ phones that they would need to enter to keep watching.”

Is this move from Netflix a way to compete with Disney+?

Many people do believe that, with Disney+ potentially taking away a lot of customers from Netflix, the latter is looking for ways to increase its profit.

This is a reasonable belief since Netflix did not seem too concerned with password sharing a few years ago when the company had very little competition.

However, with existing services like Disney+, Hulu, and Apple TV+ already threatening Netflix’s hold on the market along with a few more streaming platforms launching in the near future, it seems that cracking down on password sharing is one way in which Netflix will try to level the playing field.

Will cracking down on password sharing work for Netflix?

For now, it is still unknown how well this move will work for Netflix. At the moment, a lot of consumers are already voicing their anger at this news.

“If Netflix does this I think it’s going to backfire on them and hit them in the wallet,” one Reddit user said.

Another person commented: “The only reason I use [Netflix] is because I share the account with friends. Otherwise f**k all those streaming crap and back to piracy.”

This is a real concern that has been raised amidst the current “streaming war.” Piracy and file sharing used to be a big issue in Hollywood, and many experts predict that if streaming becomes too expensive and/or complicated, people will eventually opt for getting their shows and movies illegally.

Brian Feldman wrote in an article for New York Magazine: “Piracy declined because the legal options for consuming media became easier than the illegal options… Now the legal options for media consumption are once again becoming overly burdensome in both a financial and logistical sense… The best-centralized place to find media is, once again, through piracy.”

Piracy has indeed increased in recent years, so perhaps only time will tell whether Netflix and other streaming services can find a way to satisfy both their own needs and their consumers’ needs.