Disney Pens Licensing Deals With Netflix, Amazon
Disney (NYSE:DIS) has announced two new licensing deals to sell digital copies of its reruns, renewing a two-year-old deal with Netflix (NASDAQ:NFLX) to stream older shows that aired on ABC, ABC Family, and the Disney Channel, as well as announcing a new deal providing Amazon (NASDAQ:AMZN) with similar content. Amazon’s offerings will be available via its Amazon Prime streaming service.
The Amazon deal also includes animated shows featuring Marvel characters, while the Netflix release says that some shows that are still on the air, like “Grey’s Anatomy”, will be available 30 days after the last episode of each season airs. There may be other minor differences between the two deals.
Disney’s deals reflect similar deals made at Comcast’s (NASDAQ:CMCSA) NBC, News Corp.’s (NASDAQ:NWSA) Fox, and other studios that have found new revenue by licensing old shows that were otherwise gathering dust. Though some episodes will be from shows that are still running on TV, most of Disney’s offerings will be from previous seasons, while many will be even older.
Licensing old content is becoming the new standard for TV-Web streaming deals. The studios are making money off shows that were otherwise rather unprofitable while holding on to their more popular shows. Studios are also finding ways to sell the same content multiple times, to multiple vendors, like Disney did with today’s pacts, or as the CW Network did earlier this month with Netflix and Hulu, which could bring owners CBS (NYSE:CBS) and Time Warner (NYSE:TWX) over $1 billion in new revenue.
Today’s deals also show that Amazon is continuing to creep up on Netflix, building a more competitive Web video catalog. To fend off the competition, Netflix is working toward an exclusivity strategy in which it pays a premium for content that won’t be available anywhere else on the Web.