This past week, Disney announced that the mega-blockbuster film from 20th Century Studios, “Avatar: The Way Of Water”, will be coming to digital platforms at the end of the month and that it wouldn’t be launching on Disney+ at the same time, which is what we’ve seen happen over the past few years.

With Disney pushing to make more money from its films, as it looks for profitability over subscriber growth, this shift to a more traditional pre-Disney+ release schedule, with a return to a window release.  Where films go through a theatrical release, before going through digital platforms and physical home media, before being licensed out.

During a recent Morgan Stanley Technology, Media and Telecom Conference, Disney CEO Bob Iger took part in a Q&A session with Ben Swinburne from Morgan Stanley, where he was asked if Disney is looking differently at things like windowing and exclusivity, to which he replied:

Well, we’re definitely thinking about windowing and exclusivity among our own platforms, meaning between the traditional platforms, the channels, mostly but, to some extent, the movie channel, too, meaning exhibition and the streaming business. I think it’s already clear to us that the exclusivity that we thought would be so valuable in growing subs while it has some value wasn’t as valuable as we thought and content can actually exist on the traditional platform and on the streaming platform quite well without doing damage to either one because it’s actually very, very different audiences consuming those platforms. Significant in terms of an age difference, by the way, is by as much as 30-some-odd years. Abbott Elementary airs on ABC, where the median age of ABC is substantially higher than the median age of the Abbott Elementary viewer on Hulu by about 30 years. It’s actually an incredible number. So, why not have them live on both, you amortize your cost better. I think you could argue there’s some marketing impact positively on that as well.

As it relates to — so we’re looking at that. We’re also looking at movie windowing because we were so aggressive at supporting the streaming business. In some cases, we made a lot of films just for streaming. In some cases, we made films with shorter exhibition windows. In almost all cases, we made films that no longer had the sell-through window in it, which home video at one point, as we called it, was extremely lucrative for our company. So, we’re looking at all of that.

The reorg is helping us do that too because the same people that are responsible for making the content are responsible for monetizing it. And the best way to monetize it is to make use of all platforms, streaming and traditional than they have the ability to do that, the goal being monetization or profitability.

Now that the launch period of Disney+ is behind them, Disney has learned that releasing films directly onto Disney+ has meant they’ve left money on the table, at the box office and on digital purchases.  And probably, more importantly, that releasing films directly onto Disney+ doesn’t really help grow subscribers any more.  That’s not to say new films won’t be heading to Disney+, but we are likely to see them released in cinemas first, before becoming available to buy or rent on digital platforms before arriving on the streaming service.

Bob Iger also clarified that the core franchises and branded stuff would stay in-house, but other content from 20th Television might be licensed out and explained how they’ve been looking at how the animated shows like “The Simpsons” and “The Simpsons” are working out fine being on multiple platforms.

On the licensing side of third parties, we have one of the largest TV production and actually film production businesses in the country, I think probably the largest. And as we look to reduce the content that we’re creating for our own platforms, there probably are opportunities to license to third parties. It was for a while that was considered — something we couldn’t possibly do because we were so favoring our own streaming platforms. But if we get to a point where we need less content for those platforms and we still have the capability of producing that content, why not use it to grow revenue, and that’s what we will likely do.

Now there are other things to look at, too, which is windowing. If you look, for instance, — when we bought Fox, we bought a lot of, what’s called, adult animation. A lot of it aired on the Fox network in prime time. And we’re talking about not just the Simpsons but Bob’s Burgers and Family Guy, all of those.

By the way, I saw something recently about the number of billions of hours that that content is consumed on Hulu is extraordinary. Over 3.5 billion hours of that content consumed on Hulu as — for instance. So that suggests that there are opportunities to license the content to others first. As the Simpsons has done, the Simpsons, there are over 33 episodes of the Simpsons on Disney+, and it’s one of the more popular programs on Disney+, yet it’s — they’ve all been on the FOX network. So that’s, I think, an interesting learning for us that you can still put product on that does extremely well in streaming but that is — were driving more revenue with a balanced model of licensing to third parties and streaming to ourselves.

There have been many questions about how Disney was going to approach licensing content out following Bob Iger’s return, as some shows have been sold/licensed to other platforms, some of which are exclusive.  Bob Iger is pretty clear that the main brands, like Disney, Marvel, Pixar and Star Wars, are probably going to be off-limits, but with the huge collection of content from its studios like 20th Century Studios, ABC and FX, its likely, we will see these popping up on other platforms in the future, to help with making sure the entertainment division is profitable.

Do you think Disney should return to licensing and windowing films on digital first?  Let us know on social media!






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Roger Palmer

Roger has been a Disney fan since he was a kid and this interest has grown over the years. He has visited Disney Parks around the globe and has a vast collection of Disney movies and collectibles. He is the owner of What's On Disney Plus & DisKingdom. Email: Twitter: Facebook:

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