This strategy follows the footsteps of streaming giant Netflix, which implemented a similar approach in 2022. The move aims to add millions of subscribers and bring the Disney-owned streaming services closer to Netflix's level of success.

In an email sent to Hulu subscribers, the streaming platform announced the addition of limitations on sharing accounts beyond the subscriber's household. The updated subscriber agreement, effective from January 25, states that users are prohibited from sharing subscriptions with individuals outside of their primary residence. Hulu also mentioned the possibility of scrutinizing user accounts to ensure compliance.

While Hulu did not provide details on how exactly they plan to analyze user accounts, Netflix, which started its password crackdown last year, uses information such as IP addresses and device activity to determine account usage within the Netflix Household. Hulu's updated terms align with those of Disney+ and ESPN+, both of which implemented a password crackdown in November in Canada. Disney+ subscribers have until March 14 to comply with the new policy.

Disney CEO Bob Iger acknowledged the prevalence of password sharing among Disney-owned streaming services in August, emphasizing the company's technical capabilities to monitor such activity. This password crackdown is seen as a pivotal step towards driving subscribers and profitability, with Disney aiming to make its overall streaming services business profitable by the end of 2024. Despite the financial success of Hulu, which has a higher average revenue per user (ARPU) than Disney+, it has significantly fewer subscribers (48.5 million versus 150.2 million). The password sharing crackdown introduces an opportunity for Disney to capitalize on Hulu's potential earnings.

While these measures run the risk of alienating users, the established user base of Hulu and Netflix may be more willing to adapt to the new restrictions. In contrast, the relatively newer Disney+ may experience a smoother transition due to less entrenched user habits. Notably, Netflix permits members to add extra users for an additional fee, a model that differs from the approach taken by Disney-owned streaming services.

As Disney navigates the challenging landscape of streaming services in 2024, the company is expected to continue monitoring industry trends and competing with established leaders. Alongside the password-sharing ban, Disney plans to launch a combined Hulu-Disney+ app, aiming to enhance the user experience without solely relying on increased subscription costs.

In conclusion, the introduction of strict restrictions on password sharing by Hulu and Disney+ represents a concerted effort to drive profitability and compete with industry leader Netflix. Subscribers must comply with the new policy by March 14, and these measures may help propel Disney-owned streaming services towards financial success, making their streaming business profitable by the end of 2024.