Sorry it’s been so quiet lately. I’ve been in the midst of an existential crisis – more or less, do I jump on the Game of Thrones band wagon – or do I simply stay the course with anything else I can wrap my fragile brain around. It’s been a tough couple of weeks to say the least.
And now for your Deep Thoughts:
2019 has so many crazy things in store for us (primarily Star Wars: Episode 9 for me). One of the biggest ones though is Bob Iger’s promise to remove all of Disney’s content from Netflix by that year. Yep. The House that Walt Built has decided that it doesn’t need services like Netflix and Hulu to distribute it’s content – I mean after all, if they can build a theme park made up of “humanoid robots” (seriously – check it out here) why can’t they create a service that will rival that of Reed Hasting’s middle finger to Blockbuster?
This actually all makes perfect sense when you look at Netflix, Hulu and even Amazon as a distribution network. It’s no different really than what Disney, Paramount, Warner Brothers and Lions Gate does at the movie theatre level… they distribute 35mm prints (or today a high-speed direct connect digital file). The big difference for Disney though is the amount they will save in licensing their epic catalogue to a third party… and the new revenue they’ll get in subscription fees. From a strategy perspective this all makes perfect sense – and if you’re one of those “Profit from the Core” subscribers, this should line right up to that with their distribution vertical.
If you’re a cord cutter like me, you probably subscribe to Netflix, Hulu, Amazon, etc. etc. to fill the void of cable subscriptions. I’m a fan of most of Disney’s properties including Pixar, Marvel, ABC Television and most importantly Lucasfilm. If those are all gone from the three platforms I already have, I might as well invest in the Disney one and get rid of say… Netflix and their waning collection of B and C quality films (however I will give them props for getting SING in under a year from release, and their original programming isn’t anything to throw a stick at).
According to an article on Fortune, news of this sent shares down at both Netflix and Disney. Investors thinking that each will have a really difficult time without each other (Disney and Netflix’s distribution, Netflix and Disney’s content). At the end of the day though, Netflix is producing more and more original (and in some cases award winning content), and Disney has the network (and studios) to develop as much content they want.
So… what do you think? Is this a smart move for our beloved Disney? Should Netflix be scared that a legitimate threat is on the horizon (oh God, that Netflix catalogue is going to be so bleak when all of Disney’s props are gone)? Will you subscribe to this new service? I know I will!
Disclosure: I’m a Disney shareholder. This is not intended to persuade you into buying stock in Disney or any other company mentioned in the note above…