Walt Disney to curb password sharing from Sept
Beginning September, the Walt Disney Company will intensify its efforts to restrain password sharing to enhance subscriber growth. The company said so as it released its results for the third quarter ending June 2024. The move comes a year after Netflix ended password sharing in India and other markets in July last year after testing it out in the US and Canada. Responding to a query during the earnings call, CEO Bob Iger said, “We started our password-sharing initiative in June. That kicks in, in earnest in September. By the way, we've had no backlash at all to the notifications that have gone out and to the work that we've already been doing. We know that we need stronger recommendation engines, and we're working on that technology, and we need to make our marketing more efficient.” “But by adding all of these features, both on the technological side and also on the programming side, we're bullish about the future of this business,” he said. Chief Financial Officer Hugh Johnston said, “Password sharing is just starting to roll out. That's also going to be helpful in terms of driving growth.” “We've announced pricing, and we feel good with all of the value that we're providing to consumers. We do feel like we've earned that pricing in the marketplace, and we feel positively about that. With that will come scale benefits. The product improvements also should reduce churn and keep our consumers with us as they're evaluating their options,” he said. Talking further about the future growth, Johnston said, “I think we've made a ton of progress. We were losing $1 billion a quarter not all that long ago, and now we're making money. And our expectation is we're going to continue on that journey to making more money to get to and then ultimately well surpass the double-digit margins that we've talked about.” The company has reported a 2% growth in total revenue for the period of nine months ending June 30, 2024, compared to the same period the previous year. The company has also reported a profit jump of more than 100% for the period from $2 billion for nine months ending last year to $4.5 billion this year. Its streaming platform Disney + Hotstar saw a drop in paid subscribers from 40.4 million in Q3 FY23 to 35.5 million in Q3 FY24. Asked about positive earnings from the India business consolidation, Johnston said the company would lay that out once the deal has been closed. “Regarding the India question, we'll share that when we close the deal. I think that's the right time to do it, and we'll lay it out for you all very clearly.” On February 28, 2024, Star India Private Limited (Star India), a subsidiary of the company, entered into a binding definitive agreement with Reliance Industries Limited (RIL) and Viacom18 Media Private Limited (Viacom18), which is majority-owned and controlled by RIL, to form a joint venture that will combine the businesses of Viacom18 and Star India consisting of entertainment and sports pay TV and free-to-air networks, DTC services, film and television content library and certain production businesses (the Star India Transaction). RIL will have an effective 56% controlling interest in the joint venture with 37% held by the company, and 7% by Bodhi Tree Systems, a third-party investment company. The Star India Transaction is expected to close in the first half of 2025, subject to customary closing conditions, including regulatory approvals and government consents. If closing has not occurred by February 28, 2026, Star India or RIL may terminate the transaction, it said. Star India’s assets and liabilities were presented as held for sale in the Condensed Consolidated Balance Sheet as of June 29, 2024. “To reflect Star India at its fair value less costs to sell, we recognized a non-cash goodwill impairment charge of $1.3 billion in ‘Restructuring and impairment charges’ in the second quarter of fiscal 2024. “The measurement of this impairment charge included non-cash cumulative foreign currency translation losses of approximately $0.8 billion,” it said.