Warner Bros. Discovery (WBD) has announced plans to tackle password sharing on its streaming service, Max, with a soft rollout beginning later this year. The company’s CFO, Gunnar Wiedenfels, stated during the Q3 earnings call that the crackdown will be phased in, with “very soft messaging” to inform users of the change.

This marks the beginning of Max’s strategy to curb unauthorized access, similar to recent moves by competitors like Netflix and Disney+. The crackdown is expected to progress through 2025 and 2026, with the company seeking to boost revenue by asking non-subscribed and multi-household users to pay a little more.

The announcement came amid mixed financial results for the third quarter. Despite the crackdown, Max added 7.2 million subscribers, bringing its total to 110.5 million globally. This represents the strongest subscriber growth since the platform’s launch, highlighting a healthy uptick in revenue from subscribers. The company’s global average revenue per user (ARPU) increased to $7.84, showing a 1% rise excluding foreign exchange impacts.

WBD also hinted at its interest in mergers and acquisitions (M&A) as part of a strategy to enhance shareholder value. CEO David Zaslav commented that potential opportunities for M&A could increase with political changes, signaling a proactive approach toward future business transformations.

While the crackdown on password sharing is a key part of WBD’s strategy to drive growth, the company also faces challenges. Its Studios segment saw a 17% revenue drop, impacted by underperforming films like Beetlejuice and Twisters. Despite this, WBD’s Direct-to-Consumer segment saw an 8% revenue increase, thanks to Max’s strong performance.

WBD’s financial results were mixed, with the company swinging to a net income of $141 million compared to a net loss of $407 million last year. Revenue fell slightly to $9.62 billion, missing estimates, but the company remains optimistic about its future prospects, especially with new partnerships and continued growth in its streaming business.