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How Disney will force Netflix to change streaming - YouTube
Channel: The Verge
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- Right now, we're living in a golden age
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of streaming services.
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For $15 a month, one
service can give you access
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to basically endless movies and shows,
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with new offerings coming in every week.
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But enjoy it while it lasts,
because wheels are already
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in motion to make those
services more profitable
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for companies, and worse for you.
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Someday soon, to get the
same amount of content
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you're getting now,
you're gonna have to pay
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for more streaming services.
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(introspective music)
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So think about all the content
on a service like Netflix,
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and where all of it comes from.
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A lot of what you see is made by Netflix,
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but most of it's not,
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whether it's network TV shows, old movies,
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or movies that were just in theaters.
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A study last year found
that licensed content makes
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up 80% of what people actually watch.
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Netflix pays to license that
content from the studios,
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and it's a big part of their business.
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Access to the streaming
market is important
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for studios, too, because
streaming media is
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where the viewers are.
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Netflix added 30 million US subscribers
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in the past five years,
and that's coming at a time
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when traditional cable
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and broadcast TVs have
less viewers every year.
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But licensing to Netflix, Hulu,
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and the other services isn't the only way
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for studios to get their movies online.
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Next year, Disney plans to launch its
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own streaming service, a
direct competitor to Netflix.
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Disney's a little late to the party,
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but the service will have
so much popular content
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that it may not matter.
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Remember, Disney owns
Pixar, Marvel, Star Wars,
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and 21st Century Fox, along
with more than 90 years
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of beloved movies and TV.
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The bad news is, if it's
on Disney's new service,
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it doesn't really make sense
to put it on Netflix, too.
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Once Disney's current
licensing deals expire,
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Coco, Guardians of the
Galaxy, and Last Jedi are
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all probably gonna disappear
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from the other streaming services.
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It's a simple business move.
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Why would Disney put Last Jedi on Netflix
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when it can put it on Disneyflix
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and make you pay another
$15 a month for it?
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Even if Netflix offered to
pay more money in licensing,
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Disney would rather have you watch
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their movies on their service.
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Disney is actually really
good at making money
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when distribution methods change.
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If you look at the history of the company,
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they've done it over and over again.
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When VHS and DVDs became popular,
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Disney pioneered a system
called the Disney Vault,
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where movies would be
locked away for years,
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and only made available for
lucrative, limited-run sales.
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- [Narrator] All these
magical Disney videos
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before they disappear.
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- Whether you love or
hate the vault, it worked.
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A study in the year 2000
found that 55% of Disney fans
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replaced their VHS tapes with DVDs,
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compared to only 14% for other studios.
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Cable expanded the
playing field even more.
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Initially, Disney licensed
its content to HBO,
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but soon they realized
that the real money was
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in running their own channel.
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So the Disney channel was born.
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Last year, Disney made 40% of its money
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from cable channels, including
the ABC networks and ESPN.
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And as cord-cutters move away from cable,
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towards services like Netflix,
Disney's trying to pull
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off the same trick with streaming video,
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using its massive content library
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to build a whole new
service from the ground up.
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Now, Disney's not the only
studio trying to do that.
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Comcast has its Xfinity streaming service,
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Time Warner has HBO Go.
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The only way to see the
latest Star Trek series is
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by paying six dollars a
month for CBS All Access.
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Everybody's vertically integrating,
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which means there'll be less
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and less third-party content
available to license.
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If you wanna follow all
the movies and shows,
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you'll have to pay for all the services,
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and there'll be more and
more of them to pay for.
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If you've noticed a lot more
Netflix Originals lately,
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that's why.
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If you can't find Star Wars
or Iron Man on Netflix,
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executives are betting you'll stick
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around for Stranger Things
and BoJack Horseman,
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just like you stuck with
HBO for Game of Thrones.
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So if you follow a bunch
of streaming services now,
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you might soften the blow
by borrowing the password
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from your parents or friends, but
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that could be in danger, too.
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Streaming services can shut
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down account sharing anytime they want.
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Just look at Spotify,
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where sharing accounts
is nearly impossible.
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Netflix is slowly cracking
down on account sharing, too,
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adding distinct profiles, and stopping
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any profile that streams
multiple shows at once.
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As the industry matures,
those rules are gonna tighten,
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and it's gonna get harder and harder
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to dip into a service
without paying for it.
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Now, for corporations,
this is about the money.
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Disney paid four billion
dollars for Star Wars,
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and they wanna make that money
back as fast as they can.
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But all that leaves the
general interest fan
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in a tough place.
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Do you stick with a
single streaming service,
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and miss out on the next
wave of Marvel movies?
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Is the new Star Trek really
worth six dollars a month?
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We don't know what the future
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of streaming will look like, yet.
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The transition away from
licensing could be jarring,
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or it could happen slowly, over years.
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Competition between the new services
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could inspire a new
golden age of TV shows,
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or everyone could fall back on old tricks
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and familiar franchises,
but whatever happens,
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the pipeline between the camera
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and your screen is gonna
get a lot more controlled,
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and if you want the same amount
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of content you've been used to,
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you're gonna have to pay more.
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Thanks for watching, I hope you liked it.
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If you want more free
video content, check us out
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