JB Perrette
Warner Bros. Discovery Upping Pressure on HBO Max Password Sharing as U.S. ARPU Declines
August 7, 2025
The gloves are coming off at Warner Bros. Discovery as it begins cracking down — in earnest — on HBO Max subscribers sharing their passwords to non-paying third parties.
After spending months determining who is a legitimate user and who is not, and where password sharing is happening, the corporate parent to HBO Max is switching from a strategy of politely informing subs of their practice, to taking a “more aggressive language around what needs to happen … and putting the net in the right place,” according to JB Perrette, president of global streaming and games for Warner Bros. Discovery.
“The message language right now has been a fairly soft, cancel-able message,” Perrette said on the Aug. 7 fiscal call, adding that the company is beginning telling subs what needs to be done rather than waiting for a voluntary approach to adding an “Extra Member” to their account for a $7.99 monthly fee.
Indeed, while WBD added 3.4 million paid subscribers globally (including 200,000 in the U.S.), ending the most recent fiscal period (ended June 30) with 125.7 million streaming subscribers (including Discovery+), the platform saw a “modest negative impact” on quarterly “average revenue per user”(ARPU) in the United States.
Global streaming ARPU decreased 11% to $7.14, primarily due to growth in lower ARPU in international markets, and a 8% decrease in domestic streaming ARPU to $11.16. The decrease in domestic streaming ARPU was primarily driven by broader wholesale distribution of the less expensive HBO Max Basic with Ads.
WBD expects a “more pronounced impact [on ARPU] during the last six months of the year … and will linger into the first half of 2026.”
Perrette said, “The real benefit [from the more aggressive approach] will start probably in the fourth quarter and then kick in in 2026.” Adding that the crackdown is in the “first inning” of implementation, mandating an additional fee from password sharers will kick into full gear beginning in September.
“We still think there is a lot of upside in [HBO Max]; we want to keep it affordable and grow penetration,” he said. “The real [fiscal] benefits [from the crackdown] will start probably in the fourth quarter, and then kick-in in 2026 as we tighten the messaging.”
Perrette said bundling HBO Max with Disney+ has been a success in the United States, with the platform in “active conversations” with a number of “leading streamers” in international markets.
“We’ve seen [subscriber] churn cut in almost in half, if not greater,” he said.
Regardless, WBD shares were down 6.5% in midday trading.
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