Film-Tech Forum ARCHIVE: Disney quitting Netflix, starting their own streaming service

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Posted by Mike Blakesley (Member # 26) on 08-17-2017, 01:54 PM:

I thought it was a little odd that Disney allowed a lot of their movies -- even newer ones like Moana and the Jungle Book and Pete's Dragon remakes (but not Beauty and the Beast!)-- onto Netflix.

But now hearing the news that they're leaving Netflix and starting their own streaming service, their rationale for jumping into bed with Netflix becomes crystal clear.

Netflix was eager to have Disney movies, of course, because it would bring in some new subscribers and improve their "ratings" (or whatever they're called in that realm).

Disney, on the other hand, didn't give two craps about Netflix's subscriber numbers -- they just wanted to (a) test the streaming waters to see what kind of demand they'd generate, and/or (b) get people used to streaming Disney movies.

Netflix probably wanted to sign Disney to a long-term contract, but Disney probably only offered a one-year term with an option to renew, and now has decided not to exercise the option because they found out what they want to know. Or maybe they think there's more gold in them thar movies than what Netflix is paying them.

And, even though Disney has said they're not in favor of premium video-on-demand, this development paves the way for them to jump in that pool if and when they decide they want to.

I think it's pretty hilarious how Netflix is being used as a guinea pig here. If this works out for Disney (and it probably will), eventually we'll probably see streaming services from all the studios and Netflix will only have its own original content.

The only road block to all this for the studios (and TV networks) is, Disney is a brand people look for; none of the other studios have that luxury. Nobody is walking in the theatre door saying "When is the next DreamWorks movie?" or "You can't go wrong with a Universal film!"

Eventually though, all the people who "cut the cord" to save money will wind up spending more money than they ever did on cable TV because the only way they can get all the content they want to see will be to subscribe to 10 or 12 or more different streaming services.

Posted by Steve Guttag (Member # 268) on 08-17-2017, 02:16 PM:

I agree on all of that except I don't see the individual studios wanting to do their own streaming services. I think that they will prefer the Amazon/Netflix model. That is sort of like iTunes for music. Maintaining your own system has a lot of overhead AND, as you have pointed out nobody has that built-in, ever regenerating customer base like Disney. Disney never wanted to share IT'S revenue with anyone anyway. This way, it is all theirs. And since parents will want to pacify junior, Disney is going to be high on their desire list.

I think a test may be CBS' own on-demand stuff. I wonder how the new Star Trek series (Discovery) will do as an on-demand versus over-the-air. Will people really want to pay CBS to be a subscriber for essentially one show?

Posted by Martin McCaffery (Member # 37) on 08-17-2017, 02:57 PM:

Disney, of course, has always maintained the unified field theory of a business model. They want to have control of their presence in all media. So it makes sense they want to control their streaming, and they are uniquely situated to make this work.
Inasmuch as Disney also has a long history of removing product from distribution to increase demand, maybe they will have the good sense not to destroy the theatrical platform. But who knows?

Posted by Frank Cox (Member # 6258) on 08-17-2017, 04:14 PM:

This pushes the business model closer to that of cable TV, which is what a lot of people subscribed to Netflix to get away from.

If you want to watch show X, it's on streaming service Y. If you want to watch show A, it's on streaming service B. Show C is on streaming service B but for a higher monthly cost, or you could get it on streaming service D along with a bunch of other channels that you don't want. Does that sound familiar?

It likely drives more people toward the pirate box services since they can get everything they want with one stop and hey, look how much cheaper it is!

Posted by Mike Schulz (Member # 4297) on 08-17-2017, 05:09 PM:

quote: Mike Blakesley
Eventually though, all the people who "cut the cord" to save money will wind up spending more money than they ever did on cable TV because the only way they can get all the content they want to see will be to subscribe to 10 or 12 or more different streaming services.

This is exactly what is starting to happen right now. DirectTV, Youtube, and a few others have already started offering streaming-only TV packages.

One thing that is going to affect me in the near future is the new Star Trek series being exclusive to CBS All Access (in the US only) which they are hoping will be a big enough show to bring people on to their platform.

The only thing I see happening as the most likely outcome of this new trend from each studio hosting their own content exclusively is an increase in piracy which is what they are trying to prevent by offering streaming in the first place.

I know they all want a piece of the Netflix pie, but they are all going to shoot themselves in the foot.

If net neutrality gets eliminated, this will become ever more of a clusterf***.

Posted by Justin Hamaker (Member # 2165) on 08-17-2017, 07:44 PM:

I don't actually know what Disney's motives might have been when they signed with Netflix, but it's possible the purpose was to create a new revenue stream as DVD sales were sluggish. Given that their content likely accounts for a tangible portions of Netflix activity, they probably saw a steaming service as a way to create a new revenue stream. It also gives them a new conduit for marketing.

Given that Disney is a brand in and of it's self, I can see their streaming service succeeding where any other studio would fail.

The seriously frustrating aspect of streaming content is that it's becoming so fragmented, it's difficult to know where specific movies can be streamed. And there are still significant catalog titles which are not available anywhere for streaming, free or pay-per-view.

Posted by Harold Hallikainen (Member # 5405) on 08-17-2017, 08:42 PM:

We used to subscribe to CBS All Access for one show (60 Minutes) when we could not receive a local station over the air. Now we can, so we dropped it.

I wonder if people would subscribe to an all Disney, only Disney service. The great thing about Netflix or Amazon is the wide variety from a lot of content producers. I don't think people want to subscribe to a lot of different streaming services. But, I wonder if Disney (or some other content producer) could do Internet streaming pay per view and make it work as a business. If you only want to watch one movie from Disney, you go to disney.com and watch it (and pay for it). No subscription, just pure pay per view.

Harold

Posted by Steve Guttag (Member # 268) on 08-18-2017, 07:32 AM:

Harold, you need to ask your friends with young kids or whose kids are young enough to remember what Disney content is to them. It is more than just A Movie. It is the whole package.

If you could look into many family households, you'd see a bunch of DVDs (and previously VHS tapes) of Disney movies, shorts...etc.

And even if the Disney prime customer (ones with young kids) is a "short window of opportunity", there are new kids born every day making new customers that will want the service.

They are uniquely positioned here with a VERY extensive catalog of titles for nearly the past century of all sorts of content that is almost entirely kid/family safe.

Posted by Clint Koch (Member # 1179) on 08-18-2017, 11:32 AM:

I agree with Steve's assessment. My kids, now adults, still want to watch Disney DVD's when they come to visit the wife and I. They may be adults now but something about watching Little Mermaid, Lion King, Hercules etc. takes us all back to a different time. They enjoy watching these with their younger cousins, their friends little ones, and their old man too.

Posted by Steve Guttag (Member # 268) on 08-18-2017, 11:47 AM:

I'm partial to Lady and the Tramp

Posted by Joe Redifer (Member # 3) on 08-20-2017, 04:05 AM:

This makes me happy that I really don't give a shit about movies and TV any more. I'm not gonna subscribe to any more than 3 services. I subscribe to one now. Netflix. Did Amazon Prime a year ago and it sucked balls. Mostly the same selection as Netflix. But the quality is way worse than Netflix and Netflix is pretty bad. Totally not worth the money. Prime sucks for shipping, too. Amazon Generic is the best for me. And this is coming from a guy who has videos for people to watch on Amazon Prime and yes I make money off of it. Hulu is OK. It was good for South Park but again I kinda stopped caring about South Park. Not gonna subscribe to CBS. Not gonna subscribe to Disney.

Posted by Marcel Birgelen (Member # 6801) on 08-21-2017, 07:23 PM:

quote:
Disney’s upcoming branded streaming service will likely be priced around $5 per month in order to drive wider adoption, according to MoffettNathanson analyst Michael Nathanson.

Source

The estimated USD 5 per month price point is a bit lower than I actually expected. If this thing takes off, you can most certainly expect this figure to rise.

It will be interesting to see what content Disney will be putting on this service. Will it merely reflect what's available on Netflix right now or are they willing to dig deeper and offer a more substantial part of their catalog? Up until now, Disney has always been extremely selective in their offerings in the past, both in regards to the exhibition industry and also in their retail channels.

Posted by Jonathan Goeldner (Member # 4854) on 09-14-2017, 06:08 PM:

I'm surprised with the announcement from Apple the other day with it's Apple TV 4K box Disney isn't quickly bumping up it's streaming services - since they were obviously missing from the master list of studios participating in Apple's new venture. On the plus side, folk who bought 'Guardians of the Galaxy 2' on UHD and registered their streaming digital copy before September 9th were allowed to upgrade to the 'Dolby Vision' 4K version on Vudu. Hopefully this is the trend and immediate change that Disney UHD disc also secures you the DV digital copy as Warners and Universal allows it's customers.