Disney Exploring Possibility of Licensing Shows, Movies to Curb Streaming Losses
It can be easy to assume that a company as large as Disney is invincible. After all, it’s a corporation that has been around for a century, and its multiple revenue streams and ubiquitous media presence often make it seem like an unstoppable machine.
But Disney is just as vulnerable to market forces as any other company, as a new report from Bloomberg highlights. Bloomberg's Lucas Shaw and Thomas Buckley report that Disney is currently exploring the possibility of licensing some of its shows, films, and other content to third-party streaming services to alleviate losses from the budget shortfalls incurred by its own streamer Disney+.
Those losses have been climbing steadily over the past year, and when the company reported its most recent quarterly earnings in November, they had reached $1.5 billion for that three-month period alone. Disney’s worsening financial fortunes led in part to the removal of former CEO Bob Chapek from his post, and the reinstatement of his predecessor Bob Iger to the top spot.
The introduction of an ad-supported plan, first engineered by Chapek and executed by Iger, was intended to help turn the company’s streaming fortunes around by more efficiently monetizing new users. But customers have been slow to adopt the new tier so far, even with the ad-free Disney+ plan jumping in price from $7.99 per month to $10.99.
Disney has many options if it does start licensing out content to third parties. It could decide to distribute classic animated movies that made the company famous such as “Snow White,” “Cinderella,” or “Pinocchio,” which would give the service they land on instant prestige. Alternatively, the company could sell some or all of the rights to its impressive lineup of franchises like Star Wars and Marvel if it really wants to cash in.
Before the launch of Disney+, the company had very lucrative deals with other companies, most notably Netflix. If Disney execs do decide to get back to licensing content to outside services, the world’s largest streamer would most likely be the first place that they turn.
Disney would not be the only major media company to start licensing its shows in order to boost revenues. Warner Bros. Discovery recently struck deals with Roku and Tubi to allow those services to begin streaming shows recently removed from HBO Max. WBD is also planning to launch a free ad-supported streaming service of its own, adopting a “have-our-cake-and-eat-it-too” policy.
Disney could follow that strategy as well, but if one activist investor has his way, the company could see itself exiting streaming altogether. Nelson Peltz believes Disney made a big financial error when it bought most of FOX’s assets in 2019, and that its streaming business is almost beyond saving. Peltz believes the company should buy the portion of Hulu it does not currently own immediately, or leave streaming behind forever.
Peltz has been pushing for a seat on Disney’s board, which the company has resisted fiercely. But the company will have to start taking more and more meaningful steps to curb its streaming losses, potentially including licensing its shows and movies to third parties. Don’t be too surprised if content starts disappearing from Disney+ in the coming months, followed by the announcement that it will soon be available on Netflix, Prime Video, or elsewhere.
Disney+
Disney+ is a video streaming service with over 13,000 series and films from Disney, Pixar, Marvel, Star Wars, National Geographic, The Muppets, and more. It is available in 61 countries and 21 languages. It is notable for its popular original series like “The Mandalorian,” “Ms. Marvel,” “Loki,” “Obi-Wan Kenobi,” and “Andor.”