Disney, WBD, and other studios are licensing more content to Netflix in return for much-needed cash, but are holding back their most popular movies and shows
New York Times
Context & Ripple Effects
Disney and other future streaming rivals had previously faced a long unwind of rights already committed to Netflix, while Netflix prepared for the loss of Disney programming by building its own family slate. The renewed licensing of studio libraries to Netflix marks a reversal from the earlier all-exclusivity posture.
The move reflects the tension between monetizing catalogues now and preserving the differentiation of each studio’s direct-to-consumer service. Keeping marquee titles off Netflix is the practical boundary between those goals.
First-order effects
Disney, WBD, and peers gain licensing revenue from selected catalogue programming while retaining their biggest franchises and shows for their own services.
Netflix can add recognizable third-party titles without gaining the studios’ most important exclusives, limiting how much these deals alter each rival’s core subscription proposition.
Netflix’s programming strategy becomes more portfolio-based: licensed catalogue can fill viewing demand while internally owned and exclusive programming carries more of the service’s differentiation.
Third-order effects
If licensing continues, streaming competition may settle into a hybrid model in which rivals both compete for subscribers and supply one another, rather than treating every catalogue title as permanently exclusive.
That model raises the enduring cost of exclusivity: only titles with sufficient direct-service value are likely to justify being withheld, while the rest can become a recurring source of distribution revenue.
The trend: The streaming sector is moving from an exclusivity-first land grab toward selective content licensing that balances direct-to-consumer differentiation with cash generation.
Disney, Warner Bros and others are slowly realizing that licensing shows to Netflix makes them money while keeping the shows exclusive to their unprofitable streaming services costs them money. This will further devalue their services since they will have fewer exclusives as peo…
The average person only has so much money to go around. And even the person that does have the money for multiple streaming services, who wants to sign into 5 different accounts to watch their shows. It was always going to end up back on Netflix due to Netflix having first move…
It's almost like everything that is old is new again. It's almost like we'll soon see a second (better) attempt to bundle all these disparate streaming services and sell the at one lower price. You know, just like cable. It almost like I've been talking about/predicting these …
Studios have softened their do-not-sell-to-Netflix stances. They are holding back their most popular content, but Netflix doesn't care. — Look at what Netflix did with Suits, which topped Nielsen ratings charts for a record 12 weeks and became Netflix's “most-watched acquired …
Disney licensing content to Netflix effectively reduces streaming COGS since the cost of content for the streaming service is less burdensome to unit economics. But the issues of churn and CAC remain for Disney. Only Netflix has created a mix with positive unit economics. [image]
1) The power comes from the premium upfront charge for content that Netflix is more willing to pay as it opens up about licensing necessity, as this creates strong pure margin revenue. Not IP revitalization. 2) They should be aware of how powerful this is for Netflix and churn.
What's missing is the unit economics analysis of Disney versus Netflix streaming. Netflix has lower churn and CAC. It is reflected in the income statement if the business, but can only be understood fully based on a per customer LTV analysis. https://thestreamable.com/...
Other companies have returned to suppliers. Netflix (and Amazon) are key distributors. But they're not giving up in the US, and companies like Disney want to be global. They need library to supplement originals, and they need revenue to increase original investment. So: Netflix
Confronting sizable debt burdens and the fact that most streaming services still don't make money, studios like Disney and Warner Bros. Discovery have begun to soften their do-not-sell-to-Netflix stances. https://www.nytimes.com/...
When building their own streaming companies, many entertainment studios ended lucrative licensing deals with Netflix. But they missed the money too much. In the coming months, some will start sending a number of shows from their catalogues back to Netflix. https://www.nytimes.com…