
Netflix signs licensing agreement with Disney - MarlonPro
http://www.engadget.com/2012/12/04/netflix-strikes-licensing-agreement-with-disney-will-be-exclusi/
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andrewla
Why exclusive? I can understand why Netflix would want it, but this means that
Netflix has to pay a ton more money, thus limiting their ability to get more
of these deals. As a Netflix subscriber, I'd rather see them signing more non-
exclusive deals than fewer exclusive deals.

For Disney, it seems a ridiculous move -- why not offer multiple channels? It
seems very shortsighted to sign these exclusive contracts when the marketplace
is so immature. Why not get money for every channel that's willing to pay you?

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kmfrk
Disney own ABC and are BFFs with Apple. They already have a bunch of places to
go through, and it's probably in their interest to shut out their competitors
in the respective space anyway.

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suhailpatel
This may be great news for Netflix and I really do hope some of the Disney
stuff makes it over the pond to the UK.

One thing i've noticed though (especially in the UK) is that it's becoming a
three way licensing battle. I think eventually we'll have each major VOD
provider (Sky, LoveFilm and Netflix) have exclusive licensing arrangements
with 1/3rd of the content providers each so to enjoy a full range of content
you'd need subscriptions to all three. I wish they'd compete on other factors
other than exclusive licensing arrangements.

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xyzzyb
I don't know about UK pricing, but here in the US subscribing to Hulu Plus,
Netflix, and specific shows on Amazon and iTunes (e.g. Mythbusters) is still
_much_ cheaper than a monthly cable subscription.

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citricsquid
UK pricing is very reasonable, the problem we have is things don't make it
here until years after release, even with iTunes purchasing. I don't mind it
much because I've got used to it and I'll just watch a show once it's
available, but it does mean I can't partake in online discussions.

A good example is Breaking Bad, we got Season 4 on Netflix the same day that
Season 5 was airing in the US. I won't be able to see Season 5 until Season 6-
okay I just checked netflix and they have Breaking Bad season 5!! I love you
for inspiring me to check. Hah... see you in 8 hours when I come back to
finish this comment and the now invalid complaint.

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bartonfink
Interesting. You're ahead of US Netflix on that - just checked and I do NOT
have access to Breaking Bad Season 5.

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javis
Probably because Season 5 hasn't finished yet.

Stupid half-seasons.

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dkokelley
It's nice to see that Netflix is getting more content. I like Netflix. But I
wonder if this isn't Netflix learning to play the content producer's games. I
think it would be better for everyone if content production/distribution was
profitable not because of exclusivity but because of ubiquity. Disney could
(should) be most profitable when they make access to their product (content)
easier.

Note I am speaking prescriptively. When I say "should" I mean "the way the
world ought to work according to me..." I'd love to hear what others think
about this.

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Steko
> Disney could (should) be most profitable when they make access to their
> product (content) easier.

Ok I'll bite. Access to content has multiple facets:

First main point is price. Obviously it's not "most profitable" for Disney to
make it's stuff free. A subscription service is going to charge a monthly fee
and that fee is going to be primarily licensing and overhead. Dividing that
over a dozen companies reduces the profit taking of a market leader like
Netflix but also multiplies the overhead. Note, the 3 year contracts already
control Netflix from taking too much of the profits so it seems like there is
little incentive for Disney to want a market of say 10 netflixes over one.

Second main point is that not all access is equal. Disney has strong
incentives to associate its content with: (1) a quality service both in
delivery and interface; (2) a service that provides useful data back to
Disney; (3) a service that will promote Disney. Why should Disney associate
itself with your fly by night terribly performing service that streams in
360p, constantly drops and has a 15 step sign up process riddled with malware
carrying flash ads? Why should Disney help me launch a foreign film centric
service where Disney movies are also rans?

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dkokelley
> _Obviously it's not "most profitable" for Disney to make it's stuff free._

Granted. "Easier to access" in this case in analogous to a manufacturer
selling their wares in more stores, instead of limiting sale to a handful of
select retailers. Of course the literal interpretation of "easier to access"
means that everyone finds a copy of the latest Disney content mailed to their
doorstep with no expense to the consumer.

To your second point, assuming the marginal cost of distributing content
through 3rd string distributors is negligible, why shouldn't Disney want their
content distributed through anybody who will pay? My assumption is that all
things being equal the market will abandon those providers. On the other hand,
if Disney decides to go exclusively through a provider like Netflix, consumers
don't have the option to move their business elsewhere.

(Obviously a site that installs malware would and should be shunned by Disney,
just as a retail store that steals credit card numbers might be black listed.
These are ethically and legally wrong.)

I agree that Disney has tremendous incentive to do things they way they do. In
my personal utopia, they would be incentivized to behave as I described in the
parent thread. The question remains: how should the market and industry shift
to get us to that point?

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kmfrk
I think there's a funny balance - or maybe it's an inflection point - where
you go from being mad at Netflix over a scarce catalogue to being mad at the
content providers for keeping their movies and TV shows to themselves.

I don't know whether to think "Geez, get with the times, Netflix" or the same,
but for Disney.

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gpayan
I don’t see Star Wars coming to Netflix anytime soon unfortunately. Disney
paid $4 billion for LucasFilm to acquire essentially the rights for the
Starwars franchise. And, IMO LucasFilm still makes a lot of money from Star
Wars DVD & Blu-ray’s sales (for instance: [http://io9.com/5843342/star-wars-
blu+rays-break-sales-record...](http://io9.com/5843342/star-wars-blu+rays-
break-sales-records-take-in-84-million)).

Overall, Lucas has made close to $3.8 billion with DVD sales
([http://www.statisticbrain.com/star-wars-total-franchise-
reve...](http://www.statisticbrain.com/star-wars-total-franchise-revenue/)).
This is one of the reasons why Star Wars movies are not available on iTunes
and other VOD platforms.

Putting those titles on Netflix would decrease their value. Netflix would have
to pay big money for that…

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dougbarrett
I disagree. From what the article sounded like, Disney is all in on this.

Disney has been providing Netflix content for their streaming service probably
since day 1. I remember when it first launched, I believe Lost was available
on the server. All 6 seasons are available and have been since the series
finale.

The future for entertainment is not physical media that you can buy. It's much
easier and quicker for me to switch my TV to my Roku box, load up Netflix and
start a movie than it is to switch to Bluray, and wait for it to load and show
previews. I can't remember the last time I purchased a DVD/Bluray that wasn't
in the bargin bin for $2, but we watched Netflix just last night.

I don't think Disney is going to lose out on Star Wars sales if they start
streaming it, there will always be people that want to buy the package so when
the internet is off, and all they have is a portable DVD player, they can
watch Star Wars, but by making this deal with Netflix they are only increasing
their profits, there is no devaluing going on here.

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adrianm
Is it weird that reading this news actually brought a tear to my eye? No, not
because I am such a Disney or Marvel fan that I couldn't live without their
content being available to stream at my convenience.

No... I just honestly think it's truly beautiful to see companies bring
elements of what I always conceived would be part of "the future" into my
actual (non-imaginary) life. I think this deal could perhaps finally solidify
the Internet as being the mainstream medium of digital content delivery.

Don't worry, I'm not forgetting about iTunes. But this is DISNEY. Maybe I'm
just biased because I was one of those 90s kids (not really so long ago!) with
shelves full of Disney VHS's. Perhaps it's a strange trigger; but the
breakneck speed of our innovative times has finally hit me.

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donpdonp
This is an interesting upside to studio consolidation. With this deal, Netflix
has access to Pixar and LucasFilm titles too.

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desbest
Also there's Marvel and Touchstone.

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sev
Since Disney is part owner of Hulu[1], I wonder how the exclusivity of Netflix
will play out?

[1]<http://en.wikipedia.org/wiki/Hulu>

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l0c0b0x
How is this a 'good deal' for Netflix and it's subscribers?

We've got this great feature coming up, IN THREE YEARS!.

yay?

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xyzzyb
…

Read the read of the article.

""" That deal also includes first-run rights to direct-to-video releases,
which will begin appearing on Netflix in 2013. What's more, the two companies
have also announced a separate multi-year agreement that will see popular
Disney catalog titles like Dumbo and Alice in Wonderland be made available on
Netflix beginning today. """

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xyzzyb
It's not even like this is a long article. It's literally a 140 word
paragraph.

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debacle
I may never buy a DVD again.

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ImprovedSilence
Two years ago my DVD player broke. A year ago I replaced by laptop with a
macbook air. No CD drive anywhere in site. And I've hardly noticed. I don't
even remember what DVD's look like. And as somewhat of an apartment dwelling
transient, I don't mind the open shelf space, and lack of another box I have
to haul around in life after DVDs/CDs. I think generations will look back at
the way we stored information and think, "what a waste of physical material".

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jdechko
Hopefully this deal will also include more recent films like the Pixar movies,
Tangled, etc. There's little that's more frustrating that having your kids
scratch up their movies, rendering them unwatchable. Fortunately, I've made
iTunes copies of many movies, but they get new movies faster than I can keep
up. And my oldest, 5, stepped on the Avengers less than a week after buying
it, and cracked the disc. Fortunately, I had already ripped it, so I burned it
back to DVD.

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mirzmaster
More Netflix content we Canadians can't watch. <sigh/>

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mdm_
Pfft, totally moot anyways. By 2016 the average Canadian internet package will
be so expensive/low cap, subscribing to Netflix will be completely
impractical.

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TommyDANGerous
Wow, nice move on Netflix's part. Disney movies/shows will equal cartoons,
Marvel, and now Star Wars.

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jonursenbach
Wonder if this agreement includes Star Wars now that Disney acquired
Lucasfilm...

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thisisrobv
Really excited about the Disney catalog titles. Will be interesting to see how
this plays out short term for them, I can imagine a lot of families
subscribing over the holidays.

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VikingCoder
Is this specifically Netflix Instant Watch, or isn't it?

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njharman
2016! Who (other than investors/competion/etc) the fuck cares? 3+ years out?
Like is netflix even going to be in bui

Stuff 3mo out isn't even on my radar, mostly.

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mayukh
It gives them momentum to strike deals with other studios now.

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shmerl
When will come the era of DRM free Netflix?

