Disney CEO Bob Iger is going all in on the company's upcoming video-streaming platform. Image source: Disney.
Netflix shrugs off the loss of Disney content
When Disney announced its looming departure a year ago, Netflix CEO Reed Hastings initially stated that he wasn't concerned about the loss. He implied that international growth at Netflix would more than make up for any disgruntled Disney-loving users who departed.
Hastings maintained a similar view during the latest earnings call. When asked how much of Netflix's current content is licensed, particularly from either Disney or Twenty-First Century Fox (NASDAQ: FOX) (NASDAQ: FOXA), he refused to give an answer. However, he did say that the percentage has been on the decline, because Netflix has been anticipating that more of its competitors may want to take back their content to create their own video-streaming services. He said the company has been expecting this trend for a while, which is why it started investing in original content years ago.
Currently, Netflix is actually relying on both Disney and Fox for part of its original content library. Disney creates a Marvel series for Netflix, while Fox supplies the Nurse Ratched series. Hastings said that the company has been pleased with the performance of these two original shows so far, and that users can expect additional original titles from Fox.
While losing Disney content in 2019 will constitute a real blow, Netflix will have rights to Disney films made in 2016, 2017, and 2018 for a good while. However, it will still be hard for Netflix to compete with the Disney-branded platform, which will be chock-full of content from strong brands like Pixar, Marvel Studios, Lucasfilm, and Walt Disney Studios.
Why Netflix should take Disney's advance seriously
On the earnings call, Hastings said Netflix's strategy to compete with Disney is to just keep doing what it's been doing: producing content, investing in marketing, and making sure its interface is up to date. That's a relaxed view of the competitive landscape, considering the type of platform Disney might release next year.
On March 14, Disney completely reorganized its company to create a new direct-to-consumer division that will house its streaming businesses. This new internal structure proves that Disney is going all -in on its video platform. Disney also recently made a big hire in Kevin Swint, who previously helped out with content initiatives at both Apple and Samsung.
Disney's streaming service is expected to be family-friendly, with a special focus on content for kids. This could help it set itself apart from Netflix, which doesn't yet have a site for parents who just want children's movies and TV shows.
