Disney made big waves in 2017 when it said it would remove its movies from Netflix by 2019 and launch its own stand-alone streaming service. A year later, Warner Bros. said the same. And then Comcast joined the fray.
The streaming service landscape is growing. The industry, once dominated by a few companies, is now more than a dozen strong, and more players keep entering the game. Comcast, Warner Bros. and Disney are the latest entries, signifying a major shift in strategy for traditional cable television companies. In the past, these giants have licensed their content to services like Netflix, Amazon and Hulu. However, that's about to change — and it could be bad news for Netflix, in particular.
"And, as invincible as Netflix may seem to be, it ain't," Peter Csathy, founder of Creatv Media, said in a newsletter last week. "Disney, Apple and WarnerMedia SVODs [subscription video on demand] are coming later this year — joining Amazon, DirecTV Now and a host of others that are already hell-bent on taking Netflix down a notch ... or several. So, this year Netflix will be challenged like never before. And, investors will feel it."
If traditional media companies like Disney, Warner Bros. and Comcast do make good on their promise to retract content from Netflix and not renew licensing deals, the company could lose about 20 percent of its total content library in terms of programming hours, according to Ampere Analysis data.
Netflix's big draw with consumers has been its exclusive content, shows like "Umbrella Academy," "Stranger Things" and "Unbreakable Kimmy Schmidt," and its lack of commercials. Having access to Disney films from franchises like Marvel, "Star Wars" and its catalog of animated features only bolstered Netflix's reputation for having a wide variety of quality content.
"There's a billion hours of television content being consumed today [in the U.S.]," Netflix CEO Reed Hastings said during a conference call in January. "We're winning about 10 percent of it. ... Disney, they have great content. We're excited for their launch, and maybe they grow over a couple years to 50 million hours a day, but that's out of the billion."
Without a brand like Disney, Netflix doesn't necessarily lose that prestige, but it must now figure out how to replace the shows and movies that it will lose when these contracts expire — and that process isn't cheap.