Popular movies and TV series are now available on the smart devices like mobiles and tablets through online media streaming. All players in the market are trying hard to capture the emerging markets as it is becoming popular over the last few years. Disney is all set to disrupt the market with the launch of direct-to-customer service. The major difference for consumers will be in the form of Disney contents being removed from Netflix which will be its main competitor and making them available through its own service.
Small Screen is Big Playground
Disney is closing the deal with Netflix by the end of 2018 for the rights of streaming to make the grounds ready for its own show. The decision is crucial as the Netflix platform brings in around three hundred million in annual revenue for the company. For the first time in the last two decades, market trends are showing that sales of movie tickets are decreasing in recent years. People watching movies in theaters have declined by seventeen percent since 2012 for the age group of 18-to-24 years. Moreover, Disney is right in expecting that the trend is just a sign of more drastic change in coming years. Netflix is in the frontline of the digital media revolution. There is a trend of relying on digital streaming services instead of cable and customers are either leaving cable packages or not signing up for it. Both the Disney Channel and ESPN have been experiencing the silent and steady decline in subscribers.
Other players in Streaming Business
Hulu was the streaming platform for Disney’s content but it could not match the competence of Netflix. Having a partnership with four media companies such as Disney, Fox, Comcast, and Turner which have their own established legacy, Hulu could not focus on any one market strategy.
Netflix was very aggressive for markets and has established itself as a premium content player through billions in investment. Amazon Prime is another contender in the market with its millions of shipping subscribers which could prove to be a good source to build its consumer base.
The Advantage of Own Media
The Walt Disney Company already has TV-shows and movies that consumers want and have a record of hit movies like ‘Star Wars’, Marvel, and Pixar. Disney has a capability to produce excellent media content that consumers are actively seeking. It does not need to spend on trial and error to make hit content for its new service because it already owns the rights to such valuable media properties. In 2018, Netflix has plans on spending around eight billion USD on content development while Disney does not have this pressure. Disney has its media library produced since its inception years ago. A built-in base of subscribers can be generated with its extensive intellectual-property library which is expected to pull in loyal Disney lovers.
Disney has also acquired Twentieth Century Fox movie studio, the National Geographic, Sky, and FX networks to strengthen its base. The deal with Twenty-First Century Fox’s entertainment business could be decisive in its bet to grab the market from Netflix.
Own Media Vs Own platform
Netflix has seen an unprecedented response from people and its subscriptions are on the rise. Its growth plans were supported by investors with the huge amount of capital. It eventually decided to make its own content and offering a mass of successful programs. The company is making strategies to stream at least half of its content as its original in-house productions. Disney has seen this as a potential threat and decided to develop its own platform.
Disney has announced recently that its movies will be removed from Netflix in 2019, followed by the launch of its own streaming platform. Netflix shares declined by four percent in extended trading. The epic battle is clear at least initially– Disney with its own media content is developing its own platform while Netflix with its own platform is developing its own media. Market experts can perceive the challenge Disney is putting before Netflix.
