Netflix to Become ‘THE’ Family OTT Service
– Signs a Deal Directly with Disney
– OTT Services Pass the Tipping Point
– Netflix Gets Revenge on Starz
Netflix has bypassed Viacom’s Starz and signed an exclusive
deal with Disney and its studios. The deal will make Netflix
the “pay TV” service for Disney content starting in 2016 when
the Disney deal with Viacom’s pay TV channel Starz ends.
Starz, which ended its deal with Netflix earlier this year,
supplied content mainly from Disney and Sony Pictures. Starz
said it let its deal with Disney expire because it wants to
use the money to develop more lucrative original content, a
path that Netflix is also eyeing. Original content has brought
lots of eyeballs and money to HBO and its premium channels and
AMC and its non-premium pay TV channels. Think of the series
“Mad Men,” Breaking Bad,” “The Killing,” “Game of Thrones,”
“Curb Your Enthusiasm” and such.
Next we’ll be asking whether Netflix is also negotiating a
direct deal with Sony Pictures!
The deal means Netflix is returning to its roots with older
and classic movies instead of its more recent move to old TV
shows. The Disney deal acknowledges that OTT services have
become a main distribution channel for content that was once
only available on pay TV. Unlike pay TV, OTT subscribers can
watch when and where they want — and on any of their viewing
Netflix’s deal with Disney includes the streaming (but not DVD
rental) rights to movies from Disney’s live and animation
studios including Pixar, Marvel and Lucasfilm, which gets
Netflix the “Star Wars” movies. Netflix will get exclusive
streaming rights to new Disney movies and non-exclusive
streaming rights to Disney’s library content, such as “Dumbo”
and “Alice in Wonderland.”
If Netflix wants to become “the family OTT service,” it could
not have selected a better studio than Disney’s. Disney chief
Robert Iger has always been a supporter of online services and
was the first to make several such deals with Apple.
Netflix can begin distributing the Disney films seven to nine
months after they are shown in theaters, a very short window
for such premium content.
Netflix is ecstatic about the deal (and no doubt quietly
chuckling about having bypassed Starz). Its chief content
officer Ted Sarandos said, “This deal brings to our
subscribers some of the highest quality, most imaginative
family films being made today. It’s a leap forward for
Estimates are that Netflix may have committed to paying $350
million or more per year for Disney’s movies.
Movies from Steven Spielberg’s DreamWorks Studios are not
included because CBS’s Showtime already has the distribution
Disney is the world’s most recognized studio name as anyone
who was ever a media-watching kid or who has any children can
attest. The deal ensures Netflix’s future success and
continued growth. How can any family with children say “no” to
The Disney films have global appeal and will help Netflix’s
expansion outside the States.
Smart TVs and smart TV adapters make every TV set capable of
watching Netflix, which has been the most aggressive at
getting its app on any and every viewing device.
OTT is growing in reach globally unlike pay TV, which may be
staying about the same in numbers of subscribers but losing
eyeballs to OTT services. Pay TV is going to lose even more
viewing time to OTT services once Netflix begins showing the