Disney is serious about establishing itself in the streaming video space. Unfortunately, the long-anticipated streaming service it launches next year is going to have a bit of a slow start, given that many titles from some of Disney’s biggest brands — well, don’t bother looking for them on the service, not at first.
(Of course, Disney hopes you’ll sign up anyway.)
On the company’s earnings call with analysts Tuesday, Disney CEO Bob Iger made it clear the service will be missing key titles from brands like Marvel, Lucasfilm and Pixar when it launches late next year. Iger said Disney’s hope is that its 2019 release slate is so strong, though, with movies like Avengers 4 and Captain Marvel as well as original series, that people who sign up won’t notice or be too put off by the lack of earlier titles.
“I don’t want to say walk before we run because it’s not quite that,” Iger said. “There’s going to be a fair amount of running going on. We want to make sure we’re managing expectations … But it’s also one of the reasons why we’re creating a fair amount of original content for it as well, original Star Wars series, original Pixar series, original Marvel series and so on. And some original films as well because it’s clear that from a library perspective while there is certainly a lot of volume, the recent studio slate will not fully be available at any one-time because of the existing deals and it would take time for those rights ultimately to revert back to us.”
To get a sense of why Disney won’t have key pieces of its content lineup accessible via the streaming service at launch, remember that the company sold streaming rights to Disney movies to Netflix, an arrangement which got under way two years ago. Starz also has licensed Disney movies, and Turner Broadcasting is home to old Star Wars titles through 2024.
Disney is reportedly going to let its deal with Netflix expire at the end of this year. But other complications remain. Disney had been in talks with Turner about buying back the TV rights to the old Star Wars titles, but things have apparently hit a wall. A source told Bloomberg that Turner would expect to get “financial considerations and programming to replace the lost films.”
Star Wars, of course, ranks among the most lucrative franchises in Hollywood. “Disney,” Bloomberg notes, “sold certain rights to Turner in 2016, before it completed plans for the streaming service. The company has released four new Star Wars films since it acquired LucasFilm in 2012, and plans to release another in December 2019. Turner paid about $275 million for the six Star Wars movies released between 1977 and 2005, plus the newer titles.”
Disney hasn’t said yet how much it will charge for the new service, just that, per Iger, the price will reflect the size of the library. As Iger told analysts, “What we want to do is we want to make sure when we launch it is viewed as a quality product that we’re serving the fans, particularly of Marvel, Pixar, Disney and Star Wars well, and that the price that we’re charging reflects the value that we’re delivering. We’ve mentioned a number of times that we have the luxury of programming this product with programs from those brands or derived from those brands, which obviously creates a demand and gives us the ability to not necessarily be in the volume game, but to be in the quality game.
“And that’s not in any way suggesting that Netflix isn’t in the quality game. There’s a lot of quality there, but they’re also in the high volume game. And we don’t really need to do that.”