In the ever-evolving content vs. pipes vs. tech battle Disney has fired a shot heard ‘round the world by announcing that it will pull all of its content from Netflix. On one side I think, it’s about time! Disney obviously has finally seen the light that Netflix is stealing a page from Amazon’s early playbook by establishing a direct link to the end user by inserting itself between the seller and the buyer. The seller in the Amazon scenario were companies like Toys "R" Us, Borders Books and Target (to name a few) turned over management of their eCommerce platforms to Amazon. But not only did they turn it over management but the actual Consumer experience was Amazon! So Amazon, by default, was who consumers felt they were actually shopping from and we all know how that ended for Borders and many other brick & mortar stores. So rather than letting Netflix Amazon them Disney decides to launch a rival streaming service (kinda late to the game if you ask me. CBS launched one back in 2014!)
But then this brings up a good shareholder value question; if my profit is going up as a result of having my content in more places for people to see and for pipe companies like Spectrum or yes Netflix to buy then why not just keep it there rather than taking precious dollars, resources, time and effort to build from the ground-up a Netflix clone that already has a 20 year head-start?
Well, the answer is that not only has Netflix Amazoned the content creators but they are pushing to encroach on their core business of creating content. No doubt a reaction to Comcast buying NBCUniversal which essentially gave them both pipes and content as well as more recently the (proposed) acquisition of TimeWarner causing an escalation in the battle. So worst case scenario the pipe companies content either acquired or built in-house eclipses (you know I was going to get that in there because of the upcoming Solar Eclipse!) any content made by the pure play content providers leaving them with nothing to sell and nowhere to sell it.
And lest we mention Amazon and not bring up that Amazon too has extended a tentacle into the fray when they launched Amazon Studios (2010) and has generated accolades with recent hits Manchester by the Sea and The Salesman. And if we know anything about Bezos is that he is a long-range thinker. Content providers just need to look at what Amazon has done over a period of time not only to retail but to cloud services, hardware..and the list goes on.
What do you think of Disney’s move? Are they delaying the inevitable? Is a dollar just a dollar no matter where you get it from?
https://www.recode.net/2017/8/8/16115402/disney-netflix-espn-streaming-service-2018-2019
https://techcrunch.com/2017/08/08/disney-is-ditching-netflix-in-2019-to-launch-its-own-streaming-service/
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