Bob Iger Reveals Disney Is “Looking Selectively” At Licensing More Content
Way before Disney+ launched, with Netflix continuing to get more popular, which started the whole cord-cutting movement, Disney CEO Bob Iger decided that licensing its content to Netflix was like “selling nuclear weapons technology to a Third World country, and now they’re using it against us.”
In the runup to the launch of Disney+, Disney began pulling content from other streaming services and not signing any new contracts, as it believed it needed to have all of its content available exclusively on its own platforms like Hulu and Disney+ to compete with Netflix.
For a few years, Disney, along with many other studios, began hoarding content for their own platforms, forcing Netflix to drastically increase the production of its own original programming. It could no longer guarantee that it would have access to all of the major studios’ back catalogues.
However, in the streaming reset caused by Wall Street deciding profitability was more important than subscriber growth, there was a gigantic U-turn within the industry as many studios started turning on the taps to licensing once again. This is because licensing had always been a major income stream for the studios, and that was almost gone.
While Disney had never fully stopped licensing, as it continued to do small deals, especially internationally with linear networks like the BBC, we’ve seen a drastic shift in strategy.
While we’ve not seen many shows or films from its iconic brands like Marvel, Star Wars, Disney or Pixar get licensed out to other streaming services or FAST platforms like Pluto or Tubi, since Iger wants to keep hold of those brands, it’s a different story with the 20th Century Studios and ABC libraries, which have been opened up for some additional mining, with shows like “Buffy The Vampire Slayer”, “Lost” and “The X-Files” being licensed out, but now on a non-exclusive basis, to gain some money to bring the entertainment divisions back into profitability.
During a recent quarterly financial investors call, Disney CEO Bob Iger was asked what his current view of licensing content out to other platforms, to which he replied:
We are already doing some licensing with Netflix and we’re looking selectively at other possibilities. I don’t want to declare that it’s a direction we’ll go more aggressively or not, but we certainly are taking a look at it and being expansive in our thinking about it. We had previously thought that exclusivity, meaning our own product on our own platforms, had huge value. It definitely does have some value. But as you know, we’re also watching as some studios have licensed content to third-party streamers, and that creates more traction, more awareness and in effect it increases not only the value of the content from a financial perspective, but just in terms of traction. So, we’re going to — we’re looking at it with an open mind, but I don’t think you should expect that we’ll do a significant amount of it.
Roger’s POV: Licensing is always a tricky situation, with two sides to the argument. On the one hand, keeping hold of content on an exclusive basis increases the chances of someone staying subscribed. However, there are multiple counter-arguments. The main benefit is additional revenue from older content that isn’t as popular as it once was, which will now get a boost in viewership on an alternative platform. Disney seems to have become comfortable with licensing out some of its general entertainment content, but its core brands still seem locked off, and it’s not something I think Disney is going to embrace as aggressively as other studios. Bob is trying to walk a fine line between balancing the books and maintaining subscribers.
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