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Netflix Strikes Huge Deal With Disney
Reversing Efforts to Make Netflix Less Relevant
by Karl Bode 04:23PM Wednesday Dec 05 2012
Netflix has struck a massive deal with Disney that will reverse the recent trend of increasing delay windows before new releases are streamed on the service. According to Bloomberg, the new deal gives Netflix customers access to Disney's massive catalog of films, mere months after they've been in theaters. The deal puts Netflix on the same footing as premium cable channels like HBO or Starz, and is in stark contrast to studio efforts to try and make the new release window as large as possible to protect DVD sales. The deal didn't come cheap: analysts estimate Netflix is paying Disney $350 million a year for the honor of broader access to their catalog of films.

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aaronwt
Premium
join:2004-11-07
Woodbridge, VA

Unfortunately...

the bulk of the deal doesn't take effect until 2016.

NotTheMama

@verizon.net

Re: Unfortunately...

Netflix has already started adding Disney films for streaming--more than a dozen so far, so waiting till 2016 for exclusive rights on recent and new stuff isn't all that significant. Of course, I won't be surprised if the fee for streaming goes up some either; even so, still a better deal than "cable".

Safemaster
Premium
join:2004-01-18
Loxahatchee, FL

Almost there

One step closer to rid of cable sub.
--

elefante72

join:2010-12-03
East Amherst, NY

Re: Almost there

The only problem is the content cost will just be shifted to Netflix. I remember back in the 80's when Harron Cable was $7 a month all in. So now you have your local HSI provider instituting caps, and Netflix raising prices to get content, and you are back at the price that the triple play was before this "freedom" occurred.

TBH, netflix is doing the same thing cable did, bundle.

So now I have to buy a triple play to get some TV, get Amazon, get Redbox, get Netflix. This is a content providers DREAM. Multiple monetization.

FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

Re: Almost there

said by elefante72:

The only problem is the content cost will just be shifted to Netflix. I remember back in the 80's when Harron Cable was $7 a month all in. So now you have your local HSI provider instituting caps, and Netflix raising prices to get content, and you are back at the price that the triple play was before this "freedom" occurred.

TBH, netflix is doing the same thing cable did, bundle.

So now I have to buy a triple play to get some TV, get Amazon, get Redbox, get Netflix. This is a content providers DREAM. Multiple monetization.

The current news item doesn't lay out that the result will be Netflix charging more than they do now. Monthly subscription costs WILL go up.
--
A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasury.

Jim Kirk
Premium
join:2005-12-09

Re: Almost there

Prove it.

espaeth
Digital Plumber
Premium,MVM
join:2001-04-21
Minneapolis, MN
kudos:2
Reviews:
·Vitelity VOIP

3 recommendations

Re: Almost there

said by Jim Kirk:

Prove it.

Netflix has 30 million subscribers, this new venture will cost $350m/year, or about $30m/mo. That's about $1/mo per subscriber in additional expense.

Netflix net profit margin is < 10%, so on an $8/mo streaming account they have less than $0.80 in profit margin.

Unless they raise prices, Netflix will be losing money to offer this content.

Profit margin chart for reference:


anon anon

@charter.com

Re: Almost there

said by espaeth:

said by Jim Kirk:

Prove it.

Netflix has 30 million subscribers, this new venture will cost $350m/year, or about $30m/mo. That's about $1/mo per subscriber in additional expense.

Netflix net profit margin is < 10%, so on an $8/mo streaming account they have less than $0.80 in profit margin.

Unless they raise prices, Netflix will be losing money to offer this content.

Profit margin chart for reference:
[att=1]

You're not taking into the account increased subscriber base because of this deal.

cpsycho

join:2008-06-03
HarperLand
They could raise the rates by 10-20 cents and keep all subs no problem. Better then the $10 ish a cable demands.
dra6o0n

join:2011-08-15
Mississauga, ON
Reviews:
·ITalkBB
The reason why the deal is 350 million in the first place is because Disney KNOWS Netflix can make that much money and isn't going to give contents unless:

1) They gain total control of Netflix
2) They drain Netflix's profits dry and find another business to suck blood out of.

Disney still needs to profit from their DVD and Blu-Ray discs so giving Netflix a lenient stick without charging them that much would mean the usual DVD and Blu-ray shoppers who buy Disney films will all end up jumping on the Netflix bandwagon and they make most of the revenues from those discs alone in terms of merchandise.
Poetique

join:2007-08-05
Birmingham, AL
Personally I'd rather they just offer customers an option to opt out of the "enhanced" turnover time for Disney movies, seeing as I'm likely not going to watch any of them anyway. They can push me Disney movies at the present rate (or not at all) and I'd be fine.

YogiYahooeys

join:2004-08-17
Evansville, IN

I love it!

I'm planning on going home tonight and watching one of the catalog titles they've already added, probably 1 or 2 of The Fox and the Hound, Alice In Wonderland, Rescuers Down Under, The Great Mouse Detective, and Nightmare Before Christmas...

ArgMeMatey

join:2001-08-09
Milwaukee, WI
kudos:2

Cappers delight

Meanwhile, AT&T, Time Warner etc. are running the numbers to see where they should set the caps so that Netflix subscribers won't save any money by dropping their pay TV subscriptions.

anon anon

@charter.com

I bet Starz wishes

it made a deal with Netflix last year instead of being greedy. Starz won't last much longer after 2016.
b10010011
Whats a Posting tag?

join:2004-09-07
Bellingham, WA
Reviews:
·Comcast Formerl..

Do people still buy DVD's?

I mean really? Who buys a movie? Unless you have kids, then I could see buying kids movies. But people are going to buy the kids movie regardless of the streaming window. I am not saying that I am not guilty of buying DVD movies and box sets. But it is my own experience that I am going by. I can not remember the last time I watched any of the movies I own. I know people that have shelves and shelves of DVD's that sit there collecting dust.
--
Bellingham Scanner Kicks Ass! »bhamscanner.kicks-ass.org/

NotTheMama

@verizon.net

Re: Do people still buy DVD's?

DVDs: not so much. Blu-ray: absolutely... for the stuff I really like and like to watch more than once a year. Sure, I have hundreds of DVDs that I *don't* pull out very often to watch, but I will on occasion (and I'm no kid). I'll still buy anime I like on DVD if it's on sale (Blu-ray is totally irrelevant for anime as far as I'm concerned). Fortunately, these things aren't mutually exclusive.

Sarick
It's Only Logical
Premium
join:2003-06-03
USA
Reviews:
·Frontier Communi..
Well, You're forgetting this.

From my understanding.
Disney owns LucasArts, Buena Vista, Pixar, Marvel Comics, Fall Line Studios, Touchstone Pictures, Maramax, Saban Entertainment,The Muppets Studio, ESPN, ABC, A&E and Lifetime. This is only a few of them.

»en.wikipedia.org/wiki/Category:W···idiaries

If you look at these listings there is a lot more ten KIDS shows under the Disney name. Remember they own Star Wars and Marvel Comics to! These two areas are box office hits across the globe. With Disney I suspect they'll be doing a lot with these franchise by 2016.
--
Sarick's Dungeon Clipart

jseymour

join:2009-12-11
Waterford, MI
We still occasionally buy DVDs or BDs--when it's a movie one or both of us is confident we'll really, really like and want to watch over and over again, or when we can get them from the "$5 bin" at Walmart or whatever.

In fact: We just bought eight BDs from the $8 bin at Walmart. Five were some of our favourite movies we already had on DVD. At $8 a pop it was worth it to upgrade them. The other three were movies we'd rented, and knew we liked.

Being as it costs $3 or more, plus gas, to rent from the local store, and $4-$5 to rent on-line, $5-$8 for a DVD or BD is a good deal if you know you're going to want to watch it again.

Jim

spewak
R.I.P Dadkins
Premium
join:2001-08-07
Elk Grove, CA
kudos:1

and who is going to pay?

Such an amount, payable yearly, is surely going to equal a price hike.
--
Romney becomes "the" Epic Failure!

anon anon

@charter.com

Re: and who is going to pay?

said by spewak:

Such an amount, payable yearly, is surely going to equal a price hike.

So? Do the prices on anything else stay the same?

jseymour

join:2009-12-11
Waterford, MI
I wouldn't have a problem paying a buck or two more per month if the catalogue is significantly improved.

Jim
TheMG
Premium
join:2007-09-04
Canada
kudos:3

Netflix Canada?

Is this deal only for the US Netflix or does it also apply to the Canadian Netflix?
Sukunai
Premium
join:2008-05-07
kudos:1
Reviews:
·ELECTRONICBOX
·TekSavvy DSL

Re: Netflix Canada?

said by TheMG:

Is this deal only for the US Netflix or does it also apply to the Canadian Netflix?

Isn't relevant. Find something like Unblock us, and watch all of it like the rest of us do. I'm an American when it's convenient

RockCake
Premium
join:2005-07-12
Woodbridge, VA

So when...

are the Star Wars movies available?
(the good ones, not the prequels)

NotTheMama

@verizon.net

Re: So when...

Hmmm, Disney just bought 'em right? Maybe they'll show up on Netflix?

The only "good" one is the first one before it got mangled by Lucas. Maybe Disney will "restore" the original print like they've done with their other old "classics" (and then probably "vault" it for a decade or something). Well, I'm not holding my breath.

("It's a trap!")

Nightshade
Premium
join:2002-05-26
Salem, OR
21st Century Fox still owns the distribution rights to the six Star Wars movies so therefore Disney while they may own them per say it does not control the distribution channel. I would think that Netflix would have to garner a separate deal with Fox to distribute the movies on their service.
--
The true patriot is motivated by a sense of responsibility, and out of self interest for himself, his family, and the future of his country to resist government abuse of power. He rejects the notion that patriotism means obedience to the state.

NotTheMama
What Would Earl Do?

join:2012-12-06

Re: So when...

said by Nightshade:

21st Century Fox

Coming soon to a real estate office near you? Samantha Fox album?
corinthos

join:2007-10-09

Hopefully it is more than just the film catalog

I'd love to see some of the old series like Aladdin, Little Mermaid, Gargoyles, Goof Troop, and Duck Tales. There are so many that were incomplete or not released at all on dvd.
I'd actually even purchase them if they made them available through digital downloads.

TOPDAWG
Premium
join:2005-04-27
Midland, ON
kudos:3

Will itbe HD.

Now the issue how will the video look? when netflix had Disney movies from stars it was all SD and most of the video has bad ghosting going on.

TOPDAWG
Premium
join:2005-04-27
Midland, ON
kudos:3

Re: Will itbe HD.

ok NVM I see the stuff is now in HD that is great.

anon anon

@charter.com
said by TOPDAWG:

Now the issue how will the video look? when netflix had Disney movies from stars it was all SD and most of the video has bad ghosting going on.

Everyone got on Netflix for not renewing the Starz deal but Starz wanted $300 mil per year and they wanted Netflix to require both a streaming subscription AND a DVD by mail subscription AND they were still only going to offer the movies in SD.

PaCK Fan

join:2012-01-19
Richmond, VA

Re: Will itbe HD.

If Disney wants to make some serious cash, just release Song of the South.....

PaCK Fan

join:2012-01-19
Richmond, VA

Disney and Netflix

Maybe Netflix can get Disney to finally release Song of The South.....
mworks

join:2006-06-13
Faison, NC

Re: Disney and Netflix

The movie is available , I have a PAL copy. It was released in Europe several times.
Sukunai
Premium
join:2008-05-07
kudos:1
Reviews:
·ELECTRONICBOX
·TekSavvy DSL

This is full of win

I am liking the news, it is hardly negative news eh.

Of course it might raise the rate, hmm I pay 8 bucks, and cable was 65 bucks. I don't see any reason to worry.

I have not missed cable AT ALL.

I don't miss not seeing the news, and the weather and worthless crap pretending to be adequate programming.

I like watching what I want when I want for as long as I want.

Ok so I like old TV shows, the thing is, I can pick what and when and how much. And if it turns my crank to watch all of MacGuyver just because I feel like it, I can.
tim tim tim

join:2010-08-14
Lutz, FL
kudos:2

real movies.

hopefully we can get some real disney movies to watch. The freaking things costs an arm and a leg to buy the dvd or bd and half the time the ones you want arent even for sale.

CosmicDebri
Still looking for intelligent life

join:2001-09-01
Port Saint Lucie, FL

Disney/Netflix

Isn't Disney one of the playas who bought Netflix?? I thought it was Disney, Newscorp, and Comcrap/NBC......

If so, then they are just doing the shell game and moving dollars around from here to there under our noses, and in the end consumers (the mark) still lose?
--
Follow Your Bliss -- Joseph Cambell
I reject your Reality and substitute my own! -- Adam Savage, Mythbuster