Streaming Wars Heat Up As Disney Bans Netflix Ads
Here we go! And you know that Disney’s battle with Netflix (et al.) is getting serious when I am quoting The Wall Street Journal:
Walt Disney Co. is banning advertising from Netflix Inc. across its entertainment TV networks, according to people familiar with the situation, a sign that the marketing wars over streaming-video are escalating as media giants battle each other for subscribers.
Disney, Comcast Corp., and AT&T Inc. are set to spend hundreds of millions of dollars on advertising over the next year to attract consumers to their new streaming-video services as they look to compete with industry juggernaut Netflix. Netflix spent $1.8 billion on advertising last year and will be playing defense against Hollywood’s new entrants.
Disney, whose properties include ABC and Freeform, earlier this year put out an edict to staffers that it wouldn’t accept ads from any rival streaming services, but later reversed course and found a compromise with nearly every company, the people familiar with the situation said. The exception was Netflix.
Breaking It Down: Disney vs. Netflix
CNBC.com has the analysis:
“It might be the Magic Kingdom, but don’t be fooled; those guys are hard-nosed businessmen,” said Mike Vorhaus, owner of the consulting firm Vorhaus Advisors. “Disney is serious about making its streaming service work.”
The move was not a surprise. Disney’s policy change on advertisements mirrors a long-standing practice in the television industry: Networks do not accept commercials for shows that run on a competing network. For example, ABC doesn’t get air ads for “This Is Us,” which runs on NBC, or “Young Sheldon,” which runs on CBS. There are limited exceptions. Disney does accept ads from competitors on its annual Oscars telecast on ABC. And Disney’s channels have carried ads from competitor Comcast Corp., which owns NBCUniversal, to trumpet live events such as the Olympics.
“Broadcasters have never accepted each other’s ads,” Laura Martin, a media analyst with Needham & Co., said Friday. “But this represents a broadening of Disney’s definition of who its competitors are.”
How Nasty Will It Get?
Given that we’re still over a month away from the launch of Disney+, fans have got to wonder: How nasty will this battle get?
But while we’re on the subject, tell us: Will you subscribe to Disney+? Netflix? Both? Let us know in the comments.