This week, Disney announced plans to provide its own over-the-top
service to delivery Disney (2019) and ESPN (2018) content direct to consumers. In doing so, it will severe its relationship
with Netflix.
Disney’s broadcast rivals,
Comcast and CBS, are already vertically integrated from content creation all
the way to distribution. In many ways it
makes sense for Disney to do the same so that it cannot be “held up” by
distributors unwilling to provide its content on reasonable terms. (This may seem absurd since the Disney brand
is so recognizable and valued, but having complete control cannot be dismissed.)
The questions are… What will it cost Disney to be a distributor and can it
price the service so that “enough” consumers are willing to purchase it as a
stand-alone product? The media industry is evolving so rapidly that these questions are not easy ones to answer at the moment. It's definitely a huge risk and only time will tell whether it will be considered a brilliant strategy by Disney.
