Irish viewers of Netflix can settle back into their seats; the announcement that Disney is to dramatically alter its content relationship with the streaming service will affect only the US market.
The world’s largest entertainment company, and the owners of Marvel and “Star Wars”, is to stop providing blockbuster releases to Netflix US from 2019.
However, it will mean little for Irish subscribers and welcome clarity for fans of the platform’s Marvel tie-ins, which have seen Netflix invest millions in producing their own exclusive shows such as “Daredevil” and the forthcoming “Marvel Defenders”.
The lack of impact is underscored by the fact that exclusive pay-TV rights to major Disney releases here are already owned by Sky Cinema.
What Disney – and by association, Marvel – content exists on the European Netflix platform is going nowhere for now. It is at the mercy of future deals but not that announced by Disney in the US this week.
That arrangement will simply see all “pay one output” content – a film’s first move from theatres to home screens – switch from Netflix to Disney’s own platform, whenever that is launched.
It does not undermine back-catalogue material, or the ongoing relationship whereby Netflix creates original content using characters owned by Disney. These are the preserver of separate, future contractual arrangements.
In the meantime, it is “business as usual” for Netflix viewers in Ireland, a spokeswoman said.
In a statement, the company explained Disney’s move affects only its pay one output deal for theatrical films.
“US Netflix members will have access to Disney films on the service through the end of 2019, including all new films that are shown theatrically through the end of 2018. We continue to do business with the Walt Disney Company on many fronts, including our ongoing relationship with Marvel TV,” it said.
Streaming service
Disney, the world’s biggest entertainment company, will launch its own streaming service in a bid to capture digital viewers who are dumping traditional television. The move could also be seen as a way to maximise revenues on its future portfolio of “Star Wars” movies and spin-offs.
It is a calculated gamble that the company can generate more profit in the long run from its own subscription service rather than selling movie rights to others.
A Netflix spokeswoman said: “This is the reason why Netflix is developing its own content. It is investing $6 billion (€5.1 billion) this year.”
This includes projects like the forthcoming “Marvel Defenders”, “Daredevil” and “Jessica Jones” – all the intellectual property of Disney but turned into multi-part shows by Netflix.
The announcement by Disney and its varying impact is a reflection of the complexities of international streaming rights.
Sky already has a multi-year deal with Disney for its major film releases like “Frozen”, which does not appear on Netflix. Movies like “Enchanted”, “Toy Story” and “Toy Story 2” have also disappeared from Netflix selections as the rights shift.
While everybody vies for a piece of growing streaming revenues, Disney’s entry into a crowded subscription market, and the cost of technology to support it, could weigh on earnings.
Its stock fell 3.8 per cent in after-hours trade while shares of Netflix fell 3 per cent.
However, chief executive Bob Iger said the service would give Disney “much greater control over our own destiny in a rapidly changing market”, describing the move as an “entirely new growth strategy” for the company.
