Over the past few years, we’ve seen Disney drastically change its stance on treating its original content.  Initially, the core concept of an original was that it was only available exclusively on a single streaming service and a major incentive to encourage new signups.

Disney, along with other studios, was spending billions of dollars on new original content to compete with Netflix, which only started creating its original programming once all the major studios started pulling their content for their own streaming services.

While the new streaming services were in their initial launch period and trying to encourage as many new subscribers as possible, original content was seen as a key asset.  But in the past year or so, we’ve seen things change as Disney, along with other studios, look to make their streaming services profitable.

We’ve seen Disney sharing its streaming original programming on its own linear channels and between its streaming services like Hulu, ESPN+ and Disney+.  But we’ve also seen Disney license out its original content to other streaming services and linear channels, especially internationally.

In the UK, several shows, including “Love, Victor,” “Under The Banner Of Heaven,” and “Extraordinary,” have been licensed to UK broadcasters such as the BBC and ITV. Similar licensing deals have also been done in Latin America.

During a recent presentation at the MIPCOM event in Cannes, France, EMEA content chief Diego Londono spoke about how their views on exclusive windows have evolved and changed, revealing that “we are open to different models” and are “more flexible in terms of the types of deals we do.”

Diego also explained how they are looking at things a little differently, stating that “Out of the gate there was a focus on ‘full commissions’ but as things have evolved we are definitely much more flexible.”

Paolo Agostinelli, who is Disney EMEA’s SVP, Affiliate and Content Distribution, also told the audience that Disney has entered a “different stage of the life cycle” and “now it’s about windowing.”  Adding, “If there is one approach we must follow it’s that we don’t want to be too dogmatic.  We have strategic priorities and ideas and are open to dialogue.”

The biggest reason for this shift is about money and profitability.  Making an expensive original drama series like “Rivals” is expensive.  While it does benefit Disney+ initially and provides a boost in viewership and new subscriptions, over time, the initial value of the show decreases, as viewership will naturally decline a year or so after its initial release.  Licensing originals out to other platforms helps generate additional revenue and allows originals to reach a different audience. 

Disney has also returned more to the idea of “windows” for its movie business, rather than rushing films to Disney+, now most of its films are being released in cinemas, then on to digital platforms to buy, before eventually being released on physical media such as DVD, then hitting Disney+.   This generates income throughout the chain and also continues to make more money later down the line as movies are licensed out to other platforms and channels years later.

One of the other big issues that streaming services like Disney+ face in the UK and Europe is that they are required to have a certain amount of local content to comply with legal quotas. Londono revealed that Disney+ is licensing more content since it “increases our volume of local content and gives additional funding to free-to-air players at a difficult time.”

It’s also much cheaper to license an existing show than create a new original show.  The initial phase of Disney+ was that they were creating original content for a global release, which isn’t something I see completely changing, but we are likely to see a lot less in the future as Disney pulls back on spending.  Disney is also much more open to licensing out its general entertainment content than any of its iconic brands like Marvel, Pixar or Star Wars.

Londono also said that the primary strategy is to create local content to “make the biggest impact in the local market.” “We don’t adjust a story to make it more ‘travellable’.  But the good thing is there is more appetite for international content anyway nowadays.”

A big-budget show like “Rivals” will also have local appeal. In general, audiences have much more interest in international originals than they did a decade ago, and that interest will likely continue to grow.

Roger’s Take: While the initial concept of an Original being exclusive to a streaming service forever was a powerful idea, almost every other streaming service stole the concept, only to realise that in doing so, they were losing out on the revenue that they had been used to having for decades. 

There’s also the other reality: how much value does keeping a three-year-old show locked away on a streaming service have when it can be licensed out to a local broadcaster for additional revenue, with few downsides? It’s also a much better alternative to the dreaded asset write-down approach, aka the “cancelled and removed” option that Disney has fully embraced.

What do you think of Disney licensing out original content?  Let me know on social media!

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: Roger@WhatsOnDisneyPlus.com Twitter: Twitter.com/RogPalmerUK Facebook: Facebook.com/rogpalmeruk

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