Streaming giant Netflix got a little less giant with Disney’s announcement that starting in 2019 they’ll launch their own streaming service, using the BAMtech technology that currently powers MLB.com. WWE’s streaming service and more. For now the deal only includes new Disney branded films such as Frozen 2, the live action Lion King and Toy Story 4.
“This acquisition and the launch of our direct-to-consumer services mark an entirely new growth strategy for the company, one that takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands,” Disney CEO Bob Iger said in a statement. The company announced the plans as part of reporting fiscal Q3 earnings, which included a 3% revenue decline in its cable networks group.The media conglomerate said it will launch an ESPN-branded multi-sport video streaming service in early 2018, followed by a new Disney-branded direct-to-consumer streaming service in 2019. Those will be powered by BAMTech, in which Disney will hold a 75% stake. The current plan is for Disney and ESPN streaming services to be available for purchase directly from Disney and ESPN; in app stores; and from authorized pay-TV partners.
In 1994, Marvel decided to make a move very similar to the one that Disney is making now. It acquired a small comics distributor called Heroes World and distributed its comics exclusively through that one company. Marvel was the biggest publisher in comics at the time. This small distributor couldn’t handle the volume, according to Chuck Rozanski, one of the biggest comics retailers in the country. As a distributor, the company lowered the wholesale discount to retailers and forced them to cover part or all of their shipping costs. Even worse: it couldn’t get the orders right.
While I’m all for learning the lessons of Heroes World – a debacle that set the stage for the modern era of comics distribution – but streaming content has a bit more leverage than direct sales distro.
At The Verge, Bryan Bishop has more analysis as it relates to Millarworld:
That amounts to Netflix getting into the publishing business, turning it from a streaming service that creates related content into a full-fledged entertainment company that operates across multiple mediums. It’s still early in Netflix’s evolution, and the company certainly hasn’t risen to power in the same way other movie studios and production companies have. But if you squint, the long-term strategy is clear: this isn’t just about creating movies and shows to compete against those from studios like Disney or Sony. This is about becoming a new Disney outright, with the diversified portfolio of properties that comes with it.
In essence, we’re seeing a repeat of the cable diversification as HBO, Showtime and Cinemax launched and then competed for movies and eventually their own original programming. And as more and more people become wirecutters with overpriced cable packages, adding up all the streaming services you’ll need become less and less of a bargain.
Still, more opportunities for content creators down the line.
Heidi MacDonald is the founder and editor in chief of The Beat. In the past, she worked for Disney, DC Comics, Fox and Publishers Weekly. She can be heard regularly on the More To Come Podcast. She likes coffee, cats and noble struggle.