Hey monkeys,
Just recently Walt Disney decided to pull its content away from Netflix. Why is this important? This move by Disney may be marking a major shift in the future of media consumption.
Disney, which reported fiscal third-quarter earnings Tuesday, said it will end its deal with Netflix, beginning with its 2019 film releases, and will launch its own Disney-branded streaming service. The deal was struck in 2012 but didn’t start until 2016. By then, it had become clear that the fees Netflix was paying to license media companies’ content weren’t enough to offset the loss of pay-TV subscribers who have cut the cord or downgraded to smaller bundles of channels, enabled by the availability of content on services such as Netflix.
Disney has decided that it can do better off without Netflix in the picture. Apparently Disney's operating income from cable networks has fallen 23% in the third quarter.
Disney will have the opportunity to remedy that situation during its next round of negotiations with pay-TV providers, which will begin with Altice USA , whose contract expires this fall. The media company can use a combination of price increases and provisions that stipulate that a portion of pay-TV subscribers must receive its channels.For Netflix, it is impossible to know how many new subscribers have signed up to watch Disney’s new releases. The company now has until 2019 to come up with a substitute. It said Monday it was acquiring comic book publishing house Millarworld for an undisclosed amount. That could offer a clue to its ambitions for competing with Disney’s Marvel. In the meantime, Disney content may continue to aid its subscriber additions.
Although I don't care much about Disney, I can't help but feel that the future of media consumption will rely on me paying for multiple streaming services. Disney has said that they will be charging $10 for their new streaming service, and I doubt that Disney's move will force any Netflix members to jump ship but rather to purchase both.
I'm curious as to what you monkeys think of this:
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Would you be willing to pay an extra $10 on top of Netflix for a second streaming service?
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Do you think more companies will be making this move in the future?
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Do you see Disney succeeding with this move?
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Are you disappointed with Disney's move or indifferent?
Only people with young children would ever pay for this. Nobody likes the multiple account, but this can be managed through sling, roku, playstation, etc quite easily. Disney didn't need to do this. Content doesn't need to be exclusive. They can have things on multiple platforms
I'm truly curious as to how effective this could possibly be. I do agree with you on the multiple platform idea. I feel as though that would be better, however, I'm assuming they believe that if they have their content on multiple platforms no one will bother paying for the standalone platform.
That's flawed thinking on their part. Casual watches would never subscribe anyway, and people who need disney specific programming are willing to pay for standalone. They really don't understand the modern consumer. This is going the way of the music industry streaming wars.
I think that the entire media industry will eventually transition to competing via channel rather than aggregating content. Netflix was a big deal not because of any groundbreaking idea they had but because they were the firs to market with that idea. They basically took Blockbuster and turned it digital - nothing crazy here. Their most recent advances have all been around machine learning and getting more of a user's time - nothing crazy here either.
That's where their original programming comes into play: Netflix knows that as tech talent and ML techniques become more commoditized, other content providers can simply launch their own competing services. It's not about the service, it's about the content. I have an HBO Now subscription on top of Netflix for the sole purpose of catching Game of Thrones in HD every Sunday right at 9PM rather than torrenting it the next day. There's currently no Netflix show that I like, so as it stands HBO's 1-hour per week is more time than I spend on average on Netflix. Disney knows this - kids want to watch whatever show Disney has, not the latest Korean action thriller or Danish lifestyle drama on Netflix, and those kids parent's would be more than willing to shell out $10 per month so they can cover all their kids' wish lists.
I can see this becoming the norm where individuals are essentially paying for individual content providers. However, I feel as if some service would come out in the far future that provides an aggregation of content providers for a discounted price - rebranded cable.
You've already got it. You already have cable that is on-demand, provides information about shows, and allows you to subscribe to or drop service on-the-fly. It's called your phone, your computer, your smart TV. That, I think, is the real opportunity for content providers: a way to cut out the middleman in the aggregation system and charge full price. HBO can get their $9.99 from Time Warner per customer, or they can get $15 every month from customers who just want HBO.
Imagine a household paying $80/mo for cable but that only watches Fox, HBO, Disney, and the occasional PPV event. They can catch Fox online, subscribe to a Disney and HBO service for maybe $30, and go to their friend's house for PPV if it isn't already on HBO. Fox gets their ad revenue directly, HBO and Disney get their full cut of subscription costs. This trend will, I think, continue so long as the cost of faster internet keeps diminishing.
This was a stupid move. Netflix isn't going to feel much pain, but Disney will sure lose a lot of eyeballs. No one is going to pay another 10-15 dollars a month for yet another streaming service, this time one that's essentially only for children (and even then, not your only option). Not sure how the hell this decision was analyzed, but seems like a massively bad idea.
Disney will be a top 3 streaming player once they release it in 2019. Their IP is unparalleled. Content is king.
Unless you are a kid, I am not sure that their IP is that compelling, especially since they haven't decided what to do with Marvel / Lucasfilms. I am not saying they won't be successful, but I think their non-kids IP is too heavily weighted toward movies for a lot of people to justify paying a monthly membership fee.
ESPN though has so much potential as a streaming service, but judging by what ESPN has become in the last couple of years, I am not expecting much.
wonder what kind of views Rogue One and Captain America are getting
I think this is Disney scrambling as poor results from their subsidiary ESPN are coming out. For me, the only reason that I have cable is because of sports. Other than that, there is no reason I can't pick up media on the internet.
I think people in this thread have to give the guys at Disney a little slack here. I'm assuming they looked at their model and saw that Netflix didn't make any sense for them. By creating their own streaming service, I don't know if they have the ability to get people to pay for their service. I could see something in the future where you pay for only the channels you want, each through a unique streaming service. Personally, I love this, as it allows me to pay the bear minimum to watch sports and CNBC. Everything else I don't want to pay for anyways.
For me personally, zero impact unless they take ESPN off of cable and move it into streaming. With children it could be a larger impact. We are paying for Netflix and i and still trying to figure out why. Neither my wife or I watch it.
which they are? in early 2018
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