Disney’s significant announcement of a “strategic shift” in the distribution of the media company’s contents may be a big loss to Netflix but it was momentous decision towards capturing a growing and potentially very lucrative segment in the streaming services industry—children programming.
According to the Washington Post, family friendly programming is considered the future front in the battle for domination of streaming services. Over the years, streaming companies such as HBO, Netflix, Amazon Prime Video and Hulu tried to corner the growing children programming segment but they never really achieved significant progress on this aspect.
Disney's family-friendly programming
Thus, by breaking away from Netflix, Disney will have the strategic advantage to provide “high-quality, family-friendly programming on a kid-friendly service.” In other words, Disney could succeed where other streaming services failed—capturing the hearts of children and the pockets of their parents.
In an interview at CNBC, Walt Disney CEO Bob Iger said that although the media giant still maintains a “good relationship” with Netflix, it decided to move its contents off its streaming service starting 2019. Disney will have its own branded direct-to-consumer streaming network, which would serve as the new home for Disney movies.
With its huge arsenal of cartoons, animated movies, and other child friendly contents, Disney can easily assume the top role in streaming family and children friendly shows and films.
Indeed, Disney already has a slate for its streaming services in 2019. This would include “Toy Story 4,” “Frozen 2,” and “Lion King” live action.
2019 is ideal year for Disney
It would seem that 2019 is an ideal year for Disney to launch its own streaming services since digital consumption among children 11 and below was projected to rise significantly.
According to an LA Times report, research conducted by the firm eMarketer puts the expected rise to 74%, up from 68% in 2013.
What would the data translate into are “millions of dollars in subscription fees” for the streaming service that can provide the best contents.
Disney shares being pounded
However, initial reactions from the stock market to the impending Disney-Netflix split were not positive for Disney.
According to a report by TheStreet, Disney shares were “being pounded” after the big revelation of Disney CEO Bob Iger.
The expected drop in the Disney share was also attributed to the 2nd quarter’s “slower-than-expected” revenue growth of Disney’s cable division and its planned entry in the streaming services in order to counterbalance slowing ad sales.
According to the Washington Post, Disney reported a flat revenue growth for the 2nd quarter and a decline in its profits of about 9%.
