David Farnor | On 08, Feb 2015

Disney has considered a Netflix-style VOD service for its movies and TV shows, the company has revealed.

Talking in a conference call this week, comments from CEO Bob Iger were picked up by FilmDivider, Deadline and others about a possible House of Mouse-branded streaming service. But what would it contain? And how soon could it be launched?

The comments came earlier this week, when Sling TV was discussed in Disney’s conference call with investors following the company’s latest quarterly financial report. Dish’s web-based TV service offers US cord-cutters live streams of channels for $20 a month, including CNN, Food Network, TNT and (crucially) a range of Disney services, including the Disney Channel, ABC Family, ESPN and ESPN 2 (a big deal for sports fans in America). For those paying for kids add-on packages, Disney Junior and Disney XD are also available.

Over-the-top services that provide TV content directly to consumers (think Netflix and NOW in the UK, i.e. services without contract-based middle men) are becoming increasingly popular as a form of distribution, particularly in the States, with HBO about to launch its own streaming service, HBO Go.

Discussing the idea of Disney’s own over-the-top plans, Iger said that there was “definitely an opportunity… not just for ESPN, but for other Disney brands, to ultimately put product in the marketplace that reaches consumers directly”.

“We think we have that opportunity with a Disney branded service,” he said. “We may have an opportunity with a Marvel type product and possibly even Star Wars.”

What would that service look like, though? Disney has certainly beefed up its catalogue thanks to recent rights deals with Star Wars and Marvel, but a standalone “Marvel type product” would be limited: at present, the rights to several key players are famously owned by a range of studios, with Fantastic Four and X-Men over at Fox and Spider-Man based at Sony.

Marvel’s Cinematic Universe is expanding, but currently only consists of 10 films – following Age of Ultron And Ant-Man, that grand total will rise to 12. Marvel does, however, have a growing number of TV shows under its belt, with Agents of S.H.I.E.L.D. about to return to the UK for the second part of its second season. In the case of Agent Carter, which has no UK broadcaster, it would give British fans a chance to pay for a programme and watch it online legally.

There is also Marvel’s range of new series produced with Netflix, starting with Daredevil in April and A.K.A. Jessica Jones later this year, building up to a Defenders crossover (including Luke Cage and Iron Fist).

That impressive array of titles, though, highlights the elephant in Disney’s digital room: the deal between Disney and Netflix gives the subscription service exclusive rights to the live-action adventures of those four characters.

It is not the only agreement Disney has to licence its content out for streaming. In the US, Disney recently signed a deal to give Netflix the exclusive releases of Disney films from 2016 onwards. In the UK, Disney has an exclusive one-year window with Sky, plus an ongoing deal with both Netflix and Amazon Prime, which sees its titles (both new and classics) arrive on both streaming sites simultaneously. Netflix also has a deal with Disney for its Australian launch.

That exclusive US deal is pegged at $300 million per year, which highlights the benefit of Disney selling its content via a third party: it can sell its rights over and over in different territories and be quids in. Would that be more profitable than directly selling its content to consumers, especially if its content base (if it were limited to single brands, such as Star Wars or Marvel) is relatively limited? Cable, after all, isn’t going anywhere just yet and is a major cash cow for the company.

In addition to legal wrangling, there is also the cost of infrastructure: Netflix, for example, currently provides Disney with a platform that is compatible with a wide range of devices and already has a strong consumer awareness.

In short, were an all-in-one Disney over-the-top streaming service to launch, it would take a huge amount of negotiation and an ever bigger wad of cash. If the Sling TV deal works out well, and the Netflix series are a hit, the House of Mouse may well make a move in that direction in the future. It has, after all, already braved the digital market with the Ultraviolet-style Disney Movies Anywhere service (which, despite its name, is only available in America). With its recently minted US Netflix deal set to last for three years, though, the earliest a Disney subscription VOD service would be expected is 2019.

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