In a move that may very well signal the new norm of streaming, Hulu will soon be restricting accounts.
In an email sent to subscribers, Hulu informed customers on Wednesday that the subscriber agreement they had signed when signing up for Hulu would be changing.
“We wanted to let you know that we are making some updates to our Subscriber Agreement,” the email begins. “These terms will apply as of January 25, 2024 for new subscribers.
“For prior and existing subscribers, like you, these terms will be effective beginning on March 14, 2024, unless you acknowledge an in-app notice of these changes earlier. Until then, the terms of our prior agreement apply.”
The Disney-owned streaming platform highlighted two key changes in the email.
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The first change: “We’re adding limitations on sharing your account outside of your household, and explaining how we may assess your compliance with these limitations.”
And the second change (perhaps expecting some litigious pushback): “We’re updating aspects of our dispute resolution policies, including terms related to choice of law and updates to the arbitration agreement to be more specific about the procedures for resolving any disputes relating to your subscription and our services, and to offer you the choice to ‘opt out’ of resolving disputes through arbitration.”
This change, which will affect other Walt Disney Company streaming platforms (like Disney+ and ESPN+), certainly appears to be a direct response to the widespread practice of sharing passwords.
The updated Hulu service agreement even specifically calls out “Account Sharing.”
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“Unless otherwise permitted by your Service Tier, you may not share your subscription outside of your household,” that section reads. “‘Household’ means the collection of devices associated with your primary personal residence that are used by the individuals who reside therein.”
The agreement threateningly adds that Hulu reserves the right to terminate your access — and it’s company’s “sole discretion”: “We may, in our sole discretion, analyze the use of your account to determine compliance with this Agreement. If we determine, in our sole discretion, that you have violated this Agreement, we may limit or terminate access to the Service and/or take any other steps as permitted by this Agreement (including those set forth in Section 6 of this Agreement).
“You will be responsible for any use of your account by your household, including compliance with this section.”
Furthermore, the updated service agreement stipulates a number of other requirements.
“You agree not to impersonate or misrepresent your affiliation with any person or entity, including using another person’s username, password or other account information, or another person’s name or likeness, or provide false details for a parent or guardian,” the agreement states. “You agree that we may take steps to verify the accuracy of information you provide.”
Two factors likely contributed to this service agreement update.
First, Disney is struggling on both commercial and critical levels. To say the House of Mouse has reached a modern nadir would be an understatement.
Second, and strongly related to the first issue, there is precedent for this sort of account-sharing crackdown paying dividends.
Look no further than Netflix, which many had proclaimed dead for years as it legitimately struggled to maintain subscribers (an issue all streaming platforms are dealing with as streaming slowly morphs into a more expensive version of cable).
And yet in its most recent financial filings, Netflix revealed that it wasn’t just alive, it was thriving. And Netflix directly attributed two anti-consumer tactics (cracking down on password-sharing, and increased pricing) to its newfound lease on life.
“Revenue in Q4 grew 12% year over year, or 13% on a foreign exchange (F/X) neutral basis,” Netflix stated in a letter to investors. “Our healthy top line growth reflects the benefits of paid sharing, our recent price changes and the strength of our underlying business driven by a strong slate.”
Only time will tell if the Walt Disney Company will reap similar benefits — and boy, do they ever need to.
