Walt Disney may not be making any more long-term distribution movie deals with Netflix, but that doesn’t mean Disney won’t be making deals with Netflix for other entertainment content.
“They've also licensed a number of ABC shows,” Bob Iger, chairman/CEO of Walt Disney, said. “We hope they'll continue to do that.”
During its quarterly earnings phone call on Tuesday, Iger said the company would debut a Disney-branded subscription streaming movie service starting in 2019. Disney has yet to decide whether Marvel or Lucasfilm’s movies will be included in its new movie service.
With regard to Disney’s efforts to stay with Netflix for some TV and other movie content, Todd Juenger, senior media analysts at Bernstein Research, said in a note: “It would be very out of character for Disney to significantly reduce its commercial (and strategic) relationship with a party like Netflix, which Disney believes will continue to be a very important brand/service in the future of home video entertainment.”
Still, other analysts had concerns.
Michael Nathanson, senior media analyst at MoffettNathanson Research, said: “The acceleration of Disney’s timing to go direct-to-consumer will have added expenses and investments that will be difficult for the Street to accurately capture.”
This is compounded by news that Disney said it would kick off a streaming service for ESPN. Nathanson adds investors worry about all these streaming costs, especially as Disney enters a new ESPN affiliate-fee renewal cycle.
While some analysts do not believe Netflix would be affected, Barton Crockett, senior media analyst at FBR & Co., had a different point of view.
“We see this as negative for Netflix. More options for the consumer have to limit Netflix's pricing leverage and constrain its market opportunity, as some consumers might be happy with Disney for online entertainment, instead of Netflix.”