Netflix signs licensing agreement with Disney
engadget.com
engadget.com
For Disney, it seems a ridiculous move -- why not offer multiple channels? It seems very shortsighted to sign these exclusive contracts when the marketplace is so immature. Why not get money for every channel that's willing to pay you?
It seems like a deal like this would be more intended to attract customers of competing services than appease current subscribers (many of whom are overwhelmingly likely to resubscribe by default month after month). I could easily imagine people switching from <Amazon/Hulu/some 2016 subscription service> to Netflix because the former no longer has Disney content and the latter does.
I agree with you on Disney though - I don't really see the logic in it on their part, unless they foresee Netflix being enough of a monopoly in 2016 (possibly due in significant part to this deal itself - maybe they even expect other media titans to join in) that the sales from all competing services combined over whatever time period the deal covers would be less than the lump sum Netflix offered.
But Netflix really got Disney content back... They had Starz which previously owned the rights. But stars raised their rates and no longer are on the service. Now a big piece of what Starz brought Netflix just took.
http://www.reuters.com/article/2012/12/04/entertainment-us-n...
"Wouldn't you want your content to be on the platform with the biggest and best content, with the people most likely to pay for it, and being marketed by us?"
In effect Sky knew that Football acts much like an anchor investor in bringing the sheep with them.
I suspect Netflix is betting on a similar thing, if they overpay to ensure Disney exclusivity not only do they get the content, but they get a stronger hand in negotiations with other content owners.
Netflix will be looking to Disney to become the anchor in their negotiations with other content owners, and a very powerful and big anchor they are.
It lends enormous cachet to Netflix to have secured a deal with one of the most shrewd and largest content owners there is.
One thing i've noticed though (especially in the UK) is that it's becoming a three way licensing battle. I think eventually we'll have each major VOD provider (Sky, LoveFilm and Netflix) have exclusive licensing arrangements with 1/3rd of the content providers each so to enjoy a full range of content you'd need subscriptions to all three. I wish they'd compete on other factors other than exclusive licensing arrangements.
A good example is Breaking Bad, we got Season 4 on Netflix the same day that Season 5 was airing in the US. I won't be able to see Season 5 until Season 6- okay I just checked netflix and they have Breaking Bad season 5!! I love you for inspiring me to check. Hah... see you in 8 hours when I come back to finish this comment and the now invalid complaint.
Stupid half-seasons.
I'm sorry to have to tell you this, but there will be no season 6. Season 5 is the final one – the first half aired this summer, the last 8 episodes will air next summer.
http://www.deadline.com/2011/08/done-amc-sony-tv-reach-deal-...
(You only require one Netflix account).
The US Netflix has so much great content (but we have all the cool BBC stuff here too).
Netflix and friends don't do that or not in any big way (Netflix is doing it with Arrested Development).
I feel like, at least from a business perspective, this is the ideal circumstance for Netflix, Sky, and Lovefilm. If they can get a lock on 1/3 of the content, then everybody wins. If they got rid of exclusive arrangements, then Netflix could certainly take over from the other two, but they could take over from Netflix also. A contractually-enforced stalemate is a pretty good scenario.
Note I am speaking prescriptively. When I say "should" I mean "the way the world ought to work according to me..." I'd love to hear what others think about this.
Ok I'll bite. Access to content has multiple facets:
First main point is price. Obviously it's not "most profitable" for Disney to make it's stuff free. A subscription service is going to charge a monthly fee and that fee is going to be primarily licensing and overhead. Dividing that over a dozen companies reduces the profit taking of a market leader like Netflix but also multiplies the overhead. Note, the 3 year contracts already control Netflix from taking too much of the profits so it seems like there is little incentive for Disney to want a market of say 10 netflixes over one.
Second main point is that not all access is equal. Disney has strong incentives to associate its content with: (1) a quality service both in delivery and interface; (2) a service that provides useful data back to Disney; (3) a service that will promote Disney. Why should Disney associate itself with your fly by night terribly performing service that streams in 360p, constantly drops and has a 15 step sign up process riddled with malware carrying flash ads? Why should Disney help me launch a foreign film centric service where Disney movies are also rans?
Granted. "Easier to access" in this case in analogous to a manufacturer selling their wares in more stores, instead of limiting sale to a handful of select retailers. Of course the literal interpretation of "easier to access" means that everyone finds a copy of the latest Disney content mailed to their doorstep with no expense to the consumer.
To your second point, assuming the marginal cost of distributing content through 3rd string distributors is negligible, why shouldn't Disney want their content distributed through anybody who will pay? My assumption is that all things being equal the market will abandon those providers. On the other hand, if Disney decides to go exclusively through a provider like Netflix, consumers don't have the option to move their business elsewhere.
(Obviously a site that installs malware would and should be shunned by Disney, just as a retail store that steals credit card numbers might be black listed. These are ethically and legally wrong.)
I agree that Disney has tremendous incentive to do things they way they do. In my personal utopia, they would be incentivized to behave as I described in the parent thread. The question remains: how should the market and industry shift to get us to that point?
Have you ever heard of the "Disney Vault"[1]?
This is the third time I have purchased that film.
The more exclusive they make the content appear, more likely people will continue to pay for it (again and again).
I don't know whether to think "Geez, get with the times, Netflix" or the same, but for Disney.
Overall, Lucas has made close to $3.8 billion with DVD sales (http://www.statisticbrain.com/star-wars-total-franchise-reve...). This is one of the reasons why Star Wars movies are not available on iTunes and other VOD platforms.
Putting those titles on Netflix would decrease their value. Netflix would have to pay big money for that…
Disney has been providing Netflix content for their streaming service probably since day 1. I remember when it first launched, I believe Lost was available on the server. All 6 seasons are available and have been since the series finale.
The future for entertainment is not physical media that you can buy. It's much easier and quicker for me to switch my TV to my Roku box, load up Netflix and start a movie than it is to switch to Bluray, and wait for it to load and show previews. I can't remember the last time I purchased a DVD/Bluray that wasn't in the bargin bin for $2, but we watched Netflix just last night.
I don't think Disney is going to lose out on Star Wars sales if they start streaming it, there will always be people that want to buy the package so when the internet is off, and all they have is a portable DVD player, they can watch Star Wars, but by making this deal with Netflix they are only increasing their profits, there is no devaluing going on here.
No... I just honestly think it's truly beautiful to see companies bring elements of what I always conceived would be part of "the future" into my actual (non-imaginary) life. I think this deal could perhaps finally solidify the Internet as being the mainstream medium of digital content delivery.
Don't worry, I'm not forgetting about iTunes. But this is DISNEY. Maybe I'm just biased because I was one of those 90s kids (not really so long ago!) with shelves full of Disney VHS's. Perhaps it's a strange trigger; but the breakneck speed of our innovative times has finally hit me.
We've got this great feature coming up, IN THREE YEARS!.
yay?
Read the read of the article.
""" That deal also includes first-run rights to direct-to-video releases, which will begin appearing on Netflix in 2013. What's more, the two companies have also announced a separate multi-year agreement that will see popular Disney catalog titles like Dumbo and Alice in Wonderland be made available on Netflix beginning today. """
Progress is not quick but that is only because one has to wait for existing contracts to expire (their are usually penalties for breaking them early).
I really hope they manage to get more 'hot' content soon, since (in my opinion) Amazon appears to be releasing attractive content at a much faster rate.
Stuff 3mo out isn't even on my radar, mostly.