Disney is revisiting its assessment of streaming video-on-demand (VOD) providers like Netflix when it comes to content distribution. Netflix is a great outlet for older back-catalog and library content, but CEO Bob Iger said pay-TV operators like cable, satellite and IPTV should be the go-to guys for current and premium programming, in the face of TV Everywhere initiatives. And licensing deals will change accordingly.
Disney has a deal in place with Disney/ABC to offer current-season episodes on a 15-day delay window. That could change. “Our overall approach of late has been to make deals that increase [incremental] revenue while at the same time protect and respect the multi-channel [cable] or channel distribution value that we see today," Iger said during the earnings call for Q3 2011.
One of the key ways it will do that is by working with cable, IPTV and satellite on TV Everywhere. “We will make access to newer programming more difficult, except if a customer is authenticated as a cable or satellite TV subscriber," he said. “I think you’ll see over the next few years a lot of deals done that enable this. We now have to hope that not only is the technology improved that enables authentication but that the whole user experience gets better."
This also means that long-term, linear licensing deals will give way to shorter-term, more opportunistic agreements that take into account consumer thirst for TV Everywhere and the rapidly evolving connected device ecosystem.
“There is clearly a thirst for filmed entertainment, particularly branded high-quality entertainment, and what we’re seeing, I think stimulated in part by not only higher connectivity speeds but significant development in tablet computers, we’re looking at platforms that are creating all types of new business opportunities," Iger added.
Yet, it’s early days, and much of this is the equivalent of turning over the possibilities and tire-kicking. “You’re still at the beginning of the beginning on this," he said.
Digital distribution will become increasingly important as box-office revenue falls. In the third quarter, studio revenue was flat at $1.62 billion compared to $1.63 billion last year.
