Will More Studios Exit Netflix?

Walt Disney’s bold but somewhat expected decision to go out on its own with a streaming service  last week -- one for its live action and Pixar movies -- felt similar to other big moments in the TV business.

For example, in 2005, Disney said it would put TV shows on Apple’s iTunes Stores. In effect, that spawned the digital age for big TV series. Perhaps the business trajectory will not have the same positive result. But the move will be remembered.

After Disney’s announcement of a digital service, all eyes turned to the seemingly invincible Netflix. Disney would not be renewing these specific movie deals with Netflix.

That day, Netflix stock took a notable hit -- and then recovered. Disney’s stock also went south for a bit, then recovered.  

This can be partly attributed to many analysts dismissing the Disney news. Too little, too late, they said. It should have been done years ago. But now that the dust has settled, maybe there is more to it.



Ashwin Navin, CEO of Samba TV, told TV Watch he believes Disney can make inroads, given its experience with direct-to-consumer selling of all kinds of Disney entertainment products, as well as its large library of films, TV and other content. Couple that with the overall strong brand presence of the Disney name.

To be fair, this isn’t a complete repudiation of Netflix -- just the live action and Pixar movies. What about Marvel or Lucasfilm films? No decision has been made. What about its library TV programming on Netflix? Bob Iger, chairman/CEO of Walt Disney, hopes Netflix will continue to make those deals.

Still one studio probably isn’t going to change much. Netflix has a powerful lineup of 51 million U.S. subscribers and nearly 45 million international subs.

But what if a second major TV studio -- for example, 21st Century Fox -- does the same thing? During its earnings call, Fox executives said they were monitoring Disney’s decision carefully.

If Fox were to move -- or other studios -- would you call that a trend? Better yet, would that do any damage to Netflix? What if we add in digital efforts from CBS and other more TV-centric media companies, looking to start more digital app platforms?

Netflix probably wasn’t surprised by this news. It continues to ramp up its original content -- now powered by a $6 billion production budget for films and TV shows. Will that be its real key to the future?

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