Will CBS, Viacom and Time Warner Pull Content From Netflix?
August 9, 2017 by Douglas A. McIntyreWalt Disney Co. (NYSE: DIS) will start its own sports and movie streaming networks and pull content from Netflix Inc. (NASDAQ: NFLX), the streaming industry leader. It is a huge gamble by Disney based on the supposition it can market its content directly to consumers and build a huge subscriber base. Companies like Disney, which include Time Warner Inc. (NYSE: TWX), recently bought by AT&T; Viacom Inc. (NASDAQ: VIAB) and CBS Corp. (NYSE: CBS), may be tempted to go the same route.
Disney wants to get away from Netflix as a conduit for cord cutters, people who drop cable and watch shows directly via broadband. The trend has particularly hurt is massive ESPN sports networks, which has eroded Disney’s earnings. Disney hopes to make that money back through a new ability to market channels like ESPN to consumers. The same dynamic has begun to undermine the futures of other large sports and premium content companies.
Time Warner may have the most to gain by breaking away from Netflix. Its Warner Bros. division distributes movies via Netflix. Viacom has nearly as much to gain, potentially. Its Paramount division has a deal with Netflix. CBS has already started its own All Access business to distribute content direct to consumers.
The landscape in the streaming media ecosystem is more complex than the relationship of large content creators and Netflix. Hulu, a Netflix competitor, is owned by NBC Universal, Fox, Disney and Turner. In turn, NBC Universal is owned by cable company Comcast Corp. (NASDAQ: CMCSA), Fox by Twenty-First Century Fox Inc. (NASDAQ: FOXA) and Turner by Time Warner. Several of these content companies also have distribution deals with Amazon and Apple.
The web of distribution deals has become remarkably complicated. However, one thing is certain. Netflix has over 50 million subscribers in the United States and another nearly 50 million overseas. The bet that any content company can completely part ways with Netflix is highly risky. Disney is willing to take that chance. Its rivals are watching, and some may decide to follow its path.
Take This Retirement Quiz To Get Matched With An Advisor Now (Sponsored)
Are you ready for retirement? Planning for retirement can be overwhelming, that’s why it could be a good idea to speak to a fiduciary financial advisor about your goals today.
Start by taking this retirement quiz right here from SmartAsset that will match you with up to 3 financial advisors that serve your area and beyond in 5 minutes. Smart Asset is now matching over 50,000 people a month.
Click here now to get started.