Disney will be launching its own streaming service in 2019, which means the entertainment powerhouse will be going toe-to-toe with reigning streaming giant, Netflix. Given the highly publicized amount that Netflix will be spending on content this year, it begs the question: How will much money will Disney be spending, compared to Netflix? Well, the answer may be both surprising and not to industry spectators. Walt Disney CEO Bob Iger filled enquiring minds in on his spending plans. In a wide-ranging interview, Iger was asked if he anticipated an increase in spending adjacent to Netflix's. Here's how he responded:
No. First of all, I don't know what Netflix is spending. You may know more than I do. If you really look across all of our businesses and you include ESPN and ABC and ABC News and what we're buying with Fox, we probably spend upwards of what they're spending. It's just that we're distributing differently. So the pivot for us is not necessarily substantially more spending, it's substantially different distribution. But while we're migrating to new distribution models, we have to spend enough [to populate] the new distribution until we can move content on the older ones over.
Iger responded to THR with a solid "no" before saying that he did not know what the competition was spending. He then added that with all that Disney spends across their various businesses, it probably spends more money than Netflix, and also shared that Disney distributes their funds in a way that is different than Netflix.
Bob Iger added that Disney will be working not to spend more money and instead disburse it differently. The plan is for the Mouse House to spend enough money to populate its new service, while they await the ability to move the company's older content to the streaming service. It all sounds like a pretty firm plan. Earlier in the interview, Iger also shared that the business model for Disney's streaming service will be a focus on quality over quantity.
Throughout the interview, Bob Iger did not hide how impressed he was with Netflix and what it has accomplished, along with Amazon. So, it sounds like the beginnings of a friendly rivalry. While Netflix and Disney may now be in the same game, both will employ different strategies for playing it. Obviously, spending more is not going to automatically give you more and it will be interesting to see which strategy ends up paying off.
Netflix's television slate is the strength from which the streaming giant has arguably dominated most. It is from that arena that Netflix has been at the fore of revolutionizing how viewers consume television thanks to its popularization of the "binge-watch." With Disney owning ABC, it does have a ready-made television slate to bring to its streaming service.
Disney entering the streaming game is going to be a move that shakes up the landscape quite a bit. If there is one company that can really bring the heat to Netflix, it is going to be the Mouse House.
The good news for consumers is that the competition between the two giants will hopefully lead to even more great content for fans to enjoy. Disney has its eye on the prize, so all eyes will be on the so-call streaming wars. The reigning leader is gearing up for a huge fall and it's not the only platform doing so.