Struggling Max to join others in password-sharing crackdown

Following the steps of Netflix and Disney Plus, Warner Bros. Discovery’s Max streaming service will begin to restrict password sharing later in 2024. The streamer has no other choice, analysts say.

The streamer previously known as HBO Max is planning to begin implementing a password-sharing crackdown later this year, and a wider rollout is expected in 2025. The news was first reported by Bloomberg.

This is hardly surprising. Media companies are facing pressure to make their services profitable, and growth is not that important anymore.

Netflix has already restricted account sharing since 2023, and Disney Plus and its subsidiary platform Hulu have sent emails to users notifying them that the change is coming, too.

Most major streamers have been raising prices lately and now offer cheaper plans with ads, but it seemingly isn’t enough. The idea behind restricting password sharing is to boost subscriber counts – assuming that members who were previously free-loading get their own subscriptions.

Growth is slowing down. According to analytics platform Antenna, subscribers to streamer premium tiers grew at their slowest pace since before the pandemic. Last year, the count rose just 10.1% compared to 21.6% in 2022.

Besides, the churn rate – the number of subscribers canceling their memberships – is higher than over the last five years. It has tripled since 2019, with around 140 million cancellations in 2023.

On paper, Warner Bros. Discovery (WBD) isn’t doing badly at all – the media giant has delivered a direct-to-consumer profit of about $100 million in 2023.

But Max’s performance had little to do with it: the profit mostly included fees from pay-TV operators and revenue from licensing shows to Netflix. Plus, WBD has fired thousands of employees and shelved numerous movies and TV shows.

Add to all that the fact that the company is billions of dollars in debt, and you’ll see why investors are not impressed. Shares in WBD are down almost 24% in 2024, Bloomberg says.

Merging HBO Max and Discovery+ into Max didn’t really help, as WBD’s streaming business actually lost subscribers in the United States last year.

In 2017, HBO alone reported a profit of $2.2 billion and had 54 million members in the US. But in 2023, Max only delivered a profit of $103 million and had fewer – 52 million – domestic subscribers.

WBD is hoping that plans to expand Max to more markets in Europe this year might help. Hollywood Reporter reported last year that the streamer will launch in 22 European countries ahead of the Paris 2024 Olympic and Paralympic Games. They will be streamed live on WBD’s Eurosport channel.

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