independent news and opnion

Disney Launches a Blitzkrieg in the Streaming Wars

0 6

Today kicks off the next phase of a war, a war for your attention waged by powerful conglomerates bent on dominating what you watch and really how you live. Disney, an increasingly monopolistic company, launches Disney+, a $6.99 per month service that joins the wonderful world of classic children’s films with Pixar, Marvel, Star Wars, National Geographic, and Fox properties like The Simpsons. That Disney today serves up around 40 percent of the annual box office means that the importance of its catalog will only grow.

A bundle of Disney+ and two other Disney streaming services, ESPN+ for sports and Hulu (now a full Disney product which serves as Disney’s home for more adult fare, like FX shows and movies like Deadpool) will set you back $12.99. Disney CEO Bob Iger expects Disney+ to command up to 90 million worldwide subscribers by 2024 and 160 million across all its streaming properties.

In other words, Disney wants to be your cable provider, with a full complement of entertainment, sports, family programs, and movies old and new. The Mouse will have plenty of competition, from established streamers Netflix and Amazon, newer entries CBS All Access and Apple TV+, and future rivals Comcast (the NBC-themed Peacock) and AT&T (the new HBO Max service). Billions will be spent to leverage existing websites, phones, and broadband options, in the hopes of attracting viewers. Anyone reading this five years from now will likely chuckle, because half of these services will be gone.

Iger has pushed all his chips onto the table with this streaming play. He spent the last several years buying up as many must-see franchises as he could find, successfully cornering the market on the kinds of films that inspire rabid fan bases. He’s poised to exploit lifetimes of this worship by making the products incomprehensible without a Disney+ subscription. This isn’t a guess; Disney has come out and said it.

We already knew that Disney would lock up hundreds of its new acquisitions in the famed vault, making them unavailable to revival theaters and competing platforms. Disney pulled a substantial amount of its programming off Netflix in 2017. If you want to see The Sound of Music, The Princess Bride, all of the original Star Wars films, and hundreds of other classic movies, you’d need that Disney+ subscription.

But Disney is in the unique position of using the streaming service to interact with its bevy of film franchises. Speaking to Bloomberg Businessweek, Marvel Studios president Kevin Feige explained how the Marvel Cinematic Universe will increasingly become tied up with exclusive shows on Disney+. “If you want to understand everything in future Marvel movies … you’ll probably need a Disney+ subscription,” Feige explained. Films like Doctor Strange in the Multiverse of Madness will have plot points only accessible in Disney+ shows about Loki and the Scarlet Witch. “I’m not sure we’ve actually acknowledged that before,” Feige noted.

One can see why. There’s a concept in antitrust law known as “tying.” It is illegal to sell a product that cannot be operated, or in this case understood, without purchasing another product. Movie sequels have obviously not applied to the tying law, because fans can seek them out. But the idea of needing to purchase a monthly streaming service as a mandatory add-on to enjoying a film does take things a step further. It’s kind of like tying people’s emotional connection to entertainment material.

It goes well beyond special behind-the-scenes material or shorts (though that will appear on Disney+ as well, like a making-of documentary about Frozen 2 or several Toy Story and Monsters Inc. shorts). It goes beyond having the six collectible glasses at area fast-food restaurants or other ancillary merchandise. It even goes beyond the Easter eggs that pop up in Marvel movies, referencing other characters in the universe. Feige is saying you literally will not be able to experience future Marvel films without a subscription to a wholly different service. That’s an exercise of market power, as surely as is the restriction of all films in the Disney vault from other forms of distribution.

Disney plans to also remake some of its catalog, like Lady and the Tramp, Home Alone, Night at the Museum, and Cheaper by the Dozen. It’s unclear, but also unlikely given Disney’s modus operandi, whether the originals of these films will ever be shown, or if they’ll remain consigned to the vaults. One way to get people to watch the remake is to disappear the original.

Considering the importance of Disney+ to the company’s future, you’d expect it to pull out every stop to make it indispensable. But stepping back, you can see Disney’s model as a walking antitrust violation.

The company made five huge acquisitions (the four film vaults—Pixar, Marvel, Lucasfilm, and Fox—and BAMTech, makers of back-end technology that allows for streaming) that gave it a dominant position in filmed entertainment. It has tied iterations of its product to the Disney+ hub. It’s cutting off distribution of its product, directly withholding output to create an artificial void, losing hundreds of millions of dollars deliberately to narrow the distribution channel to its own service. And it’s underpricing the product, even giving it away for free to Verizon phone subscribers. Iger said in his own autobiography that success would “be measured in subscribers” rather than profits. This suspiciously looks like a predatory pricing scheme to gain market share, only to jack up the price later (Netflix has pulled this off beautifully).

These are the types of actions a monopolist undertakes to intensify its power. Corporate “synergy” has been a buzzword for decades, and the idea of promoting Disney+ at Disney theme parks, and vice-versa, is obvious. This is something different.

It’s hard to weep for Disney’s conglomerate competitors: Netflix, Amazon, Comcast, Apple, CBS, and AT&T are big boys with leverage of their own. But the real losers in this scenario are legion.

When peak TV shakes out and the big spending dries up, thousands of skilled production personnel will be on the unemployment lines. Thousands more talented writers and directors with ideas will have to filter them through one of a handful of enormous companies. Larger, vertically integrated studio conglomerates are likely to bargain down suppliers and distributors of its material, ensuring a larger share of profits for the mothership. Self-distribution through Disney+ or some other streaming service eliminates after-market residuals; you can’t apply subscriber payments to any one film or television show. It radically changes the money model of Hollywood, from one with broad benefits to one where the Disneys of the world reap most of the gains.

Ultimately, I believe the streaming wars will end with some entrepreneur figuring out how to bundle streaming services at one price, bringing us all the way back to a more expensive version of cable. But along the way, independent filmmakers will lose the ability to create a singular vision, indie theaters will lose their tenuous hold on survival, workers in the industry will lose the ability to profit from their successes, and fans will lose options on finding their favorite franchises. On the other hand, it’s good to be the Mouse.





Source link

You might also like

close
Thanks !

Thanks for sharing this, you are awesome !