Bob Iger: Disney+ Launching First ‘Real Foray’ Into Password-Sharing Crackdown in June, Full Rollout in September

Disney plans to launch official crackdowns on password sharing among its branded subscription streaming video platforms, led by Disney+ in June in select markets, with a full rollout planned in September, CEO Bob Iger told CNBC’s morning business show, “Squawk on the Street.”

“We’ll be launching our first real foray into password sharing,” Iger said. “But it will grow significantly [thereafter].”

While Iger did not identify which markets would begin clamping down on subscribers sharing their passwords with non-paying friends, the move aims to emulate Netflix’s successful crackdown, which has prompted growth in the streamer’s ad-supported plan, as well as lower-cost add-on memberships.

Iger said Netflix remains the gold standard in streaming, suggesting he would “certainly” be fine being second to Netflix, but that’s “not necessarily the goal.”

“They’ve done a phenomenal job in a lot of directions,” he said. “I actually have very high regard for what they have accomplished. If we could only accomplish what they’ve accomplished, that would be great.”

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Those goals include double-digit margins in the DTC market (like Netflix has), improving content recommendations to reduce churn, increasing stickiness, and reducing the cost of customer acquisition and marketing.

Iger said that when he returned as CEO of Disney (replacing his successor Bob Chapek on Nov. 20, 2022), the DTC was losing $4 billion a year, due to what he says was a strategy of chasing sub growth at the expense of the bottom line.

“It was clear that was not sustainable — and not acceptable,” he said.

The executive said the business has turned things around since then, with expectations that the DTC segment will turn its first profit in the fourth quarter this year.

“That’s a huge improvement. And we know exactly how we delivered that improvement,” Iger said.

Specifically, the CEO believes improving subscriber engagement, content recommendations, and time on the platforms are the keys to streaming success.

“We just launched Hulu on Disney+, which just came out of beta on [last] Friday, and I can tell you it’s doing extremely well,” he said, adding that recent strong viewership for the original historical drama “Shogun” supports the strategy.

“We know what we have to do, and we start with a very strong hand [with Pixar, Star Wars, Marvel, Hulu, 20th Century Studios, etc.],” Iger said. “We have the goods. Now he have to execute. We know what it takes to be successful in streaming. And not everybody has that. And not everybody can get that.”

‘Mad Money’ Host Jim Cramer Wants Netflix Removed From ‘FAANG’

In the world of high-profile Wall Street analysts, CNBC’s frenetic “Mad Money” host Jim Cramer has helped define a cottage TV industry of fast-talking  personalities targeting consumer and business investors.

On CNBC’s “Squawk on the Street,” Cramer said Netflix should be removed from a basket of top-performing tech stocks, dubbed “FAANG” (Facebook, Amazon, Apple, Netflix and Google).

Speaking Oct. 3, Cramer said that with Netflix’s stock down 29% in 2019, compared to a 18% rise for Microsoft, the subscription streaming video pioneer’s status should be re-evaluated.

“We gotta get Netflix the hell out of FAANG,” Cramer said. “I tell you that right now. I don’t know how to do it.”

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Cramer contends Microsoft should replace Netflix (and apparently Google too), thus rendering the tech group “FAAM.”

Tough love from an analyst who just five months ago penned an article in high praise of the streamer and co-founder/CEO Reed Hastings.

“Netflix is about something to talk about Monday morning,” he wrote in April. “It’s about not feeling like a stooge when everyone watched Bird Box. You can’t be a stooge! In other words, as ethereal as it sounds, Reed Hastings is right when he says ‘the real metric is can we keep our members happy.'”

Apparently keeping subscribers and investor happy can be mutually exclusive. That’s because investors care not so much about subscriber happiness, but rather subscriber growth, according to Cramer.

And Netflix laid an egg of sorts during the last fiscal period when it failed to meet sub growth projections worldwide — including losing domestic subs for the first time in more than five years.

“I’m not a Netflix fan, here,” Cramer said, alluding to the pending arrival of SVOD competition from Disney, Apple, AT&T and Comcast — the latter parent to NBC Universal’s CNBC network.

“There’s too many competitors,” he said.

Netflix reports third-quarter (ended Sept. 30) financials on Oct. 16.