Warner Bros. Discovery’s streaming platform, Max, is gearing up to tackle password sharing while accelerating its global growth strategy. JB Perrette, CEO of Global Streaming and Games, announced plans to introduce “gentle messaging” to select subscribers regarding account sharing within the next week. This initiative mirrors the strategies of competitors like Netflix, which has already demonstrated how such measures can significantly enhance profitability and average revenue per user (ARPU).
Perrette highlighted that Max, now operational in 65 global markets and expanding into Asia Pacific to reach 74 territories, achieved its first operational profit in Q3 2023 with a global subscriber base exceeding 110 million. As Max aims to grow its paid subscriber base, password-sharing restrictions will play a crucial role. Beginning in early 2024, Max will offer third-party add-on membership options, with a stricter crackdown expected by late 2025 and into 2026.
“This is an art and science trying to figure out who is actually sharing versus who is at their vacation home or on a business trip,” Perrette explained. “We’ll start some early messaging to people we feel are in a higher tier of usage as we gather data … with some explicit and implicit signals.”
Max’s Global Growth Potential
Beyond curbing password sharing, Max is leveraging its extensive franchise content to attract and retain subscribers. Hit series such as The Penguin, Dune: Prophecy, House of the Dragon, The White Lotus, The Last of Us, Crazy Rich Asians, and an upcoming series based on Stephen King’s It are central to its strategy. In January, Max will debut The Pitt, a new drama following healthcare professionals in a Pittsburgh hospital.
Perrette sees substantial international growth opportunities, estimating a potential market of 350 million high-speed internet households outside the U.S., excluding China, India, and Russia. “We are in the early innings of a big international growth opportunity for us over the next couple of years,” he noted.
To capitalize on these markets, Max is partnering with established platforms like Comcast’s Sky, Canal+ in France, and Amazon Prime Video Channels. These collaborations aim to reduce the economic risks of launching standalone services in foreign markets while expanding Max’s reach. “We want to get [Max] in the hands of as many people as possible, without creating this economic cliff,” Perrette said.
Enhancing Profitability and ARPU
By addressing password sharing and expanding globally, Max is positioning itself to boost profitability and ARPU. Netflix’s results show the potential financial rewards of implementing stricter controls on account sharing while offering affordable add-on options. For Max, combining this with high-value content and international partnerships creates a pathway to sustained growth and profitability.
As the streaming landscape matures, these measures highlight how platforms can balance user satisfaction with maximizing revenue, ensuring long-term success in an increasingly competitive industry.
Why This Matters: Learning from Netflix’s Success
Max’s approach aligns with similar efforts by Netflix, which has demonstrated how addressing password sharing can significantly boost revenue and subscriber growth. In the UK, Netflix began its crackdown by sending warning emails to subscribers suspected of sharing accounts. The platform offered these users an option to add an additional user for £4.99 per month, a strategy that proved highly effective.
By January 2023, Netflix experienced a surge in subscriptions, attributed to these measures, as individuals who previously relied on shared accounts opted to create their own or join as paid members. This contributed to Netflix adding 13.1 million new subscriptions globally in Q4 2023. In Q1 2024, Netflix reported 9.3 million additional subscribers, bringing its global total to nearly 270 million, alongside a profit surge to $2.3 billion (£1.85 billion).
These results highlight how password-sharing restrictions not only increase subscriber numbers but also enhance the average revenue per user (ARPU). By offering affordable add-on options, Netflix successfully converted unauthorized users into paying customers, demonstrating the potential financial impact of such initiatives.
