Disney is just the first of many to abandon Netflix

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 3 weeks ago '13        #1
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misterethoughts 217 heat pts217
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Disney is just the first of many to abandon Netflix
 

 
Last month, Disney announced its intention to take its films off Netflix in 2019 and start its own streaming service. I wrote that Disney could be just the first of many media companies with differentiated content to pull their deals with Netflix and offer their own streaming packages.

Indeed, we're already seeing it happen. 21st Century Fox's FX now offers commercial-free streaming of its current seasons of originals and many series from its back catalog. AMC Networks offers a similar service. The only catch is customers have to be cable subscribers in order to subscribe to either streaming service. Both started with Comcast, and FX recently struck a deal with Cox for distribution as well.

All about staying in control
When FX announced its streaming service, CEO John Landgraf wrote, "We have been diligent about recapturing the in-season stacking rights for all current original programming and recapturing the rights to all seasons of a large portion of our legacy of great original series." In other words, it's not renewing deals with Netflix or other streaming video platforms.

President of AMC Charlie Collier wrote, "We continue to build deeper relationships with fan communities across all of our programming." Those relationships are what give networks like AMC and FX the strength to move to a stand-alone model instead of selling the streaming rights of their shows to Netflix. Not only does it have the potential to generate more revenue (albeit at a greater risk), it strengthens the relationship between the network and its viewers. Netflix had a tendency to obfuscate network branding.

Disney likewise has several strong brands for its film studios, and it makes much more sense for Disney to develop a more direct customer relationship than to distribute its films through Netflix.

Ironically, Netflix itself may be the posterchild for networks to take their content off of Netflix. A growing number of subscribers are swayed to subscribe largely because of its catalog of originals. Netflix is proving a strong catalog of original content is enough to get subscribers to pay for a streaming service.

AMC and FX are missing one key ingredient
One of the big things holding back networks like AMC and FX is that they still don't have the infrastructure to control distribution. Disney bought a majority stake in BAMTech, the streaming video technology spun-off from Major League Baseball, in order to support its future streaming services. It also has a lot of experience in handling direct-to-consumer products and the customer service and billing requirements that go along with it. FX and AMC don't have that.

That's why they've initially partnered with Comcast. Comcast provides an easy way to sign up (through its X1 platform), integrates the billing with customers' current cable bills, and has a ton of experience in customer service (the quality of which is always called into question). The networks just have to worry about delivering the product.

Partnering with cable companies means these types of services will be reserved for cable subscribers. Indeed, that's likely what they want for the time being. Cable affiliate fees still provide a huge chunk of revenue for most cable networks. Over time, however, some may see value in breaking away from the cable companies and going completely over the top. It took HBO a long time, for example, but it's finally found a greater opportunity in going direct to consumers.

In the meantime, these services are great for cable as they provide yet another incentive to keep paying that bill every month. They also likely get some affiliate revenue for handling distribution and billing of the services. For Netflix, it puts further pressure on its original content to draw in subscribers and keep them from churning. In the long run, however, more over-the-top options drawing customers away from cable could ultimately benefit Netflix.

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104 comments for "Disney is just the first of many to abandon Netflix"

 3 weeks ago '04        #2
Fresh Beats 
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I can see Disney doing this because their bread is long and they have the content. Other stations need to stay humble. I'm not trying to flip between a new app each time I want to watch a show.
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 3 weeks ago '15        #3
RevolverLuciana 
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This isnt good for the general consumer as if this continues people arent gonna be able to get as much content in one place as they were before.
misterethoughts and 52 others gave props
 
 3 weeks ago '07        #4
TH35 97 heat pts97
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I said this in another thread that it’ll be a trend (sh*t leaving Netflix) but some didn’t want to listen.
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 3 weeks ago '11        #5
Sin 1164 heat pts1164
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 TH35 said:
I said this in another thread that itíll be a trend (sh*t leaving Netflix) but some didnít want to listen.
They called me crazy also when I said this
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 3 weeks ago '06        #6
daffysm 
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its not gonna fly, the idea of netflix was convenience
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 3 weeks ago '11        #7
Sin 1164 heat pts1164
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 daffysm said:
its not gonna fly, the idea of netflix was convenience
I wouldn't mind having to check several apps

Instead of just Netflix
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 3 weeks ago '14        #8
Sphynx 139 heat pts139
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 TH35 said:
I said this in another thread that it’ll be a trend (sh*t leaving Netflix) but some didn’t want to listen.
 Sin said:
They called me crazy also when I said this
 BlaqThumSoCal said:
They called me crazy 2
n*ggas looking for pats on the back like they just said some revolutionary sh*t CLEARLY this is the direction that media content and economics is headed as millennials and beyond laugh at the idea of paying $120 a month for cable

Cable is only going to exist for old people who stuck in their ways. Everybody else is going to pick and choose 1-3 $12 dollar streaming bundles and rock with what exactly it is that they want to watch. This been clear for about 5-7 years now as companies have realized the value of streaming. That's why Netflix is basically a revolving door of content, and Hulu is forced to cut major checks for content relationships. Companies know the value of their content libraries and they gon make sure they eat off their own sh*t first and forremost.

Why you think Netflix in all this debt, yet still throwing money at all the original content they can come up with. They know sooner than later that's going to be basically all they can rest their hat on, when the 5 major conglomerates take all their content to start their own streaming services
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 3 weeks ago '11        #9
Sin 1164 heat pts1164
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@ @
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 3 weeks ago '06        #10
daffysm 
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 Sin said:
I wouldn't mind having to check several apps

Instead of just Netflix
im honestly already overloaded with an app for everything else

plus having to pay for each service is insane
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 3 weeks ago '14        #11
kenya1995 2 heat pts
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Netflix been k!lling it with their own shows so whatever. Just don’t touch the office.
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 3 weeks ago '11        #12
Sin 1164 heat pts1164
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 daffysm said:
im honestly already overloaded with an app for everything else

plus having to pay for each service is insane
Individual apps are easier to cancel after whatever show I like is over

And easier to share amongst a group of friends each pays for an app
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 3 weeks ago '15        #13
Layrome 
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 Sin said:
Individual apps are easier to cancel after whatever show I like is over

And easier to share amongst a group of friends each pays for an app
What?? Why would you go all of that trouble? It makes no sense.
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 3 weeks ago '06        #14
Michael 1987 716 heat pts716
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 kenya1995 said:
Netflix been k!lling it with their own shows so whatever. Just donít touch the office.
yeah but they're not making as much back as everybody thinks they are.
 3 weeks ago '07        #15
genobee 21 heat pts21
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There's way too many streaming sites out there, which makes these type of things mean-less. If you don't wanna stream you can always download and use Kodi. My job have a business class internet so I download all my sh*t at work then upload to my synology when I get home.
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 3 weeks ago '11        #16
Sin 1164 heat pts1164
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 Layrome said:
What?? Why would you go all of that trouble? It makes no sense.
It makes a lot of sense

I pay $12 for Netflix for me and six friends and family to share while my mother pays for Hulu that we share and another pays hbo two others pay for showtime and stars

We each pay around $10 and all share the apps
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 3 weeks ago '05        #17
Y.G. 27 heat pts27
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 Sin said:
I wouldn't mind having to check several apps

Instead of just Netflix
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 3 weeks ago '17        #18
lucifershammer 1 heat pts
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 BlaqThumSoCal said:
They called me crazy 2
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 3 weeks ago '04        #19
Propel Water 20 heat pts20
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HBO been doing it
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 3 weeks ago '05        #20
Y.G. 27 heat pts27
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 Sin said:
@ @
As I said before, know one is going to pay for a billion different streaming apps. Netflix will continue to be king of streaming content. Lineup too strong.
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