Warner Bros. Discovery (NASDAQ: WBD) has confirmed its plans to enforce a strict policy against password sharing for its Max streaming service. This move follows similar actions by industry giants like Netflix Inc. (NASDAQ: NFLX) and Bob Iger-led The Walt Disney Co. (NYSE: DIS).
What Happened: WBD's CEO and president of global streaming and games, JB Perrette, on Monday revealed the company's intentions at the Morgan Stanley Technology, Media, and Telecom 2024 conference in San Francisco, reported Ars Technica.
Perrette stated that WBD sees the password-sharing crackdown as a "growth opportunity" and will be implementing it later this year. However, he did not provide specific details on how the password crackdown would be implemented or whether it would extend to the Discovery+ streaming service, also owned by WBD.
WBD is also exploring new advertising formats for its streaming service, with a focus on transactional ads. Perrette mentioned that WBD is in discussions with potential partners for bundled services, similar to the arrangement with Verizon.
"On the ad format size, we've made lots of improvements from where we were, but we still have a lot of ad format enhancements that will give us more things that we can go to marketers with, [like] shoppable ads [and] other elements of the ad format side of the house that we can improve...," he stated.
Why It Matters: This decision aligns with the strategies of other streaming services, such as Netflix, Disney+, YouTube and Hulu implemented similar policies. Netflix also experienced a significant increase in subscribers after implementing similar measures.
However, Max may not experience the same surge in subscribers as Netflix, given its relatively short four-year existence including with HBO Max. Nevertheless, Perrette highlighted that banning account sharing remains a "meaningful" financial prospect, the report noted.