Netflix buys exclusive rights to Disney movies
In a "bold leap forward for Internet television," Netflix has acquired the sole rights to stream Disney movies off of their website, netflix.com. The agreement will begin in 2016 and last for 3 years. In the meantime, Netflix has immediate access to older Disney classics, such as Pocahontas, Dumbo, and Alice in Wonderland. On the losers side of this agreement is Starz, a premium cable network whose exclusive rights to Disney movies will end in 2016, the year Netflix will take the helm. As a result of this news, Netflix's stock rose 14% while Starz's parent company's stock fell 5%. Netflix also has nonexclusive rights to movies from Paramount Pictures, Lionsgate, and MGM. Subscription to Netflix streaming is a mere $8 a month as opposed to $13-$18 a month from premium cable giants such as HBO and Showtime.
This instantly caught my attention because it highlights the major shift from premium cable to "Internet" cable. Netflix acts as its own network, not only streaming movies but countless TV shows such as Mad Men, which accounts for 2/3 of the content that is watched by paying viewers. It also is ridiculously cheaper than premium cable, for which you have to pay the monthly fee plus the fee for cable/satellite/fiber optic network/etc. Also, Netflix can be streamed through numerous devices that can be hooked up to TVs and played, such as Blu Ray players, game consoles, and Apple TV. This makes it extremely advantageous compared to premium cable, and more Americans willingly buy it. The fact that Netflix wants to invest in the other large producing companies also proves that it is not going to back down, and that it is ready to take over the movie-streaming business. It's taking decisive actions to become a bigger, more profitable corporation, and it's working.
As a consumer, this increases my want for a Netflix subscription (and for Netflix stock (a week ago)!). I want to join something that will grow bigger and that will benefit me in the long run, and I think Netflix will be doing that very soon. As a future filmmaker, I find it fascinating how these companies negotiate and how the deals affect the industry as a whole.
There are some major questions that must be asked after reading this. Is this truly as big of an event as people are claiming? Will Netflix run premium cable companies to the ground? If so, how soon can they do it?
Will Netflix be the new HBO?
