Brain Chatter: Disney's Breakup with Netflix

August 9, 2017 Ophelie Zalcmanis-Lai

Revenge of the Mouse.

That was the headline Quartz sent to those who use its text-based news app regarding the “conscious uncoupling” of Disney and Netflix.

Goop references aside, Disney’s decision to pull its content from Netflix at the end of its contract with the streaming service (2019) and then start its own streaming service has two different implications: one on the brand side, and another on the customer side.

BRAND SIDE

Just like the relationship between Amazon and retailers, Disney has to ask itself the question of, “do we compete with them or join them?” when it comes to Netflix.

Brands want owned audiences.

According to the Content Marketing Institute’s 2017 guide to B2C content marketing, 80% of marketers say they are focused on providing great experiences for audiences (duh – we hope so) and 73% state that they are focused on building their audiences.

Disney could continue to rent space on Netflix, but currently, Netflix is spending $6 billion on original content. You can bet that it’s not going to be focused on pushing out Disney.

It’s simple really: if Disney has an owned space then it has an exclusive platform to push films, shows, and other content that it creates. And there will be other content – Disney CEO Bob Iger said that Disney “is laying the groundwork for its studios and TV networks like the Disney Channel to begin creating original TV and movies for the new subscription service.”

And Disney can do it: despite some small investor dips due to this news, Disney reportedly beat earnings forecasts for the third quarter of 2017.

CUSTOMER SIDE

All this talk about money brings us to the next side of Disney’s move: audiences potentially feeling like this is a cash grab.

Disney wants a piece of the pie, so it’s going to bake its own pie.

Customers are hit all the time with pay walls and subscription-only services. While these can have their perks, how many subscription services do audiences have to have in order to consume the things they want?

Frankly, it can be a frustrating experience.

Audiences want to consume their favourite content in a seamless way. Forget the jumps and leaps to get things. While Disney content is just about a favourite for everyone, we wonder how many people will enjoy being forced into paying for yet another subscription streaming service.

This all said, moves like this take time and you can still continue Disney-bingeing up until 2019. Lucasfilm and Marvel are Disney properties, but their fates have not been decided in light of Disney breaking up with Netflix.

Audiences will also get another bonus, with Disney’s ESPN streaming service that will be released in 2018. For people tired of blackout rules within Canadian TV providers (IE: Rogers), this is some happy news.

So, will you become a part of Disney’s owned audiences? Let us know @TheTiteReport.


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