Password-sharing: Warner Bros. Discovery's profit-driven crackdown

Streaming platforms are intensifying their efforts to combat the widespread practice of password-sharing. Warner Bros. Discovery (WBD) has unveiled plans to implement stricter measures against account-sharing. The first phase of the crackdown is scheduled for the latter half of 2024, followed by a comprehensive rollout in 2025.

Yahoo Finance's Alexandra Canal breaks down the details, shedding light on how media giants are leveraging this strategy to enhance profitability.

For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.

Editor's note: This article was written by Angel Smith

Video Transcript

BRAD SMITH: Well, major streaming players attend Morgan Stanley's Technology, Media, and Telecom Conference. Execs from Netflix, Warner Brothers Discovery-- they're divulging the latest in what's next for the streaming giants. For more on this, let's get to Yahoo Finance Senior Reporter Alexandra Canal.

Allie, let's start with WBD, Warner Brothers Discovery here. We just got word that they're going to be cracking down on password sharing here. What did they have to say about that initiative? And when can users expect the crackdown to hit accounts?

ALEXANDRA CANAL: Yes, unfortunately, Yahoo Finance was able to confirm that this password-sharing crackdown is happening. It's going to hit users in the second half of this year before a wider rollout is expected in 2025.

And really, this comes on the heels of Netflix's success. I think this is a tale of follow the leader. It's not just Warner Brothers Discovery. Disney is also implementing a crackdown sharing password. We'll see users to Disney Plus and Hulu be hit with that password-sharing crackdown this month. And it all comes on the heels of the streaming profitability initiative that really all of these companies are fighting for.

WBD did become the first legacy media giant to reach full year streaming profitability. However, that number did come with quite a few caveats. The profits were boosted by licensing fees, boosted by pay TV fees from HBO. So it wasn't just pure play streaming. So there's still more room to run here.

JB Perrette, he heads WBD's global streaming and gaming division. He talked about this at the conference. And he referenced Netflix's success, and said, even though we're not at the scale of Netflix, this is still an incredible opportunity for our business when you think about boosting revenue.

And overall, subscribers in streaming really slow. I think this is something that we're going to see more and more of across the board. So unfortunately for the consumer, that just means you can't share your password. And I just got into "Sex and the City" on Max, and now soon, I'm going to have to pay for my own account. Sorry.

SEANA SMITH: I know. Well, that's the thing.

ALEXANDRA CANAL: It's a shame.

SEANA SMITH: It's unfortunate for the consumer. I've always had my own Netflix account. Something I'm very proud of, but--

ALEXANDRA CANAL: I finally do.

SEANA SMITH: My younger siblings definitely use my parents' login. And they've been upset from the crackdown that's been happening. So Max, just the latest-- makes a heck of a lot of sense. So when you take a look at Netflix's results and what happened as a result of their crackdown.

ALEXANDRA CANAL: It's all profitability.

SEANA SMITH: Maybe you think more and more are just going to adopt that. All right, Allie, great stuff. Thanks.

ALEXANDRA CANAL: Thanks.