Disney’s Streaming Service Will Cost Less Than Netflix, Carry Less Content

We’ve known for a while that Disney was launching its own custom streaming service to compete with the likes of Netflix and Hulu, but details have been harder to come by. The House of Mouse has shared some of the features and plans for its upcoming launch, and the company is acknowledging that it simply won’t have the ability to compete with services like Netflix in terms of content, at least not at first. The service, then, should be correspondingly cheaper than the $8 – $14 you’ll pay for Netflix these days.

A major piece in Variety puts the Disney plans in context. The rise of Netflix and its huge business in content production has left Hollywood racing to catch up, with starry-eyed dreams of creating their own direct pipelines to consumer households. Franchises, in this new way of thinking, aren’t just reliable generators of box office hits — they’re the engines that’ll drive consumers to sign up for new services and monthly fees. It’s why CBS has locked Star Trek Discovery to its own All Access Service, and it’s why Disney is planning to launch its own service around the IP it owns, including classic Disney films, Pixar movies, Star Wars, and Marvel. There’s real financial risk here, given what other services pay companies like Disney for rights to these properties. Here’s Variety:

In short, the evolution of the DTC [Direct to Consumer] marketplace for content will be costly, messy and risky. For starters, Disney will say goodbye to about $300 million in annual revenue it currently gets from Netflix for pay-TV rights to its theatrical releases, starting with its 2019 movie slate. Those movies — including “Captain Marvel,” “Dumbo,” “Toy Story 4,” “The Lion King,” “Frozen 2” and a new “Star Wars” installment — will now be key selling points for the new service Iger has referred to as “a Disney play.”

Image by Variety

It’s by no means certain that Disney will navigate this transition successfully. Consumers could balk if they feel the company has yanked shows and movies from other services simply to launch its own version. One point that Variety makes is that Disney doesn’t intend to even try to match either Netflix’s volume of content manufacturing or the depth of its bench in terms of licensed TV and films. It also won’t try to pull existing agreements that it’s already signed for distribution of its films and TV shows. Instead, it’ll try to focus on developing new IP around some of the properties it owns (IO9 reports that there are five live-action shows in planning phases for the network, including new stories set in the Star Wars and Marvel franchises). Shows specifically developed for Netflix, like Luke Cage, Jessica Jones, and Daredevil are all expected to remain with the streaming service, as is Iron Fist (whether that last is actually a good thing or not depends on your tolerance for interminable boardroom politics and terrible writing). Upcoming films like Captain Marvel, Toy Story 4, The Lion King, Frozen 2, and all future Star Wars films are expected to run exclusively on the new Disney service when it debuts.

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