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Disney CFO Doubles Down on Pending Netflix Distribution Pact

13 May, 2015 By: Erik Gruenwedel

When you’re Walt Disney Studios, owner of coveted Marvel, Pixar, Lucasfilm and Disney intellectual property, playing the field between traditional and new distribution is almost a right of passage.

Speaking May 13 at the MoffettNathanson Media & Communications Summit in New York, CFO Jay Rasulo said that as Disney expanded its brands, distribution of movies in the evolving pay-TV window warranted a special partner, which was Netflix. Disney’s current distribution agreement with Starz ends this year.

The landmark Netflix decision, announced in 2012, now finds the subscription streaming pioneer as a global force producing its own content for a 60-million subscriber base that dwarfs most multichannel video program distributors. When asked if affording Netflix exclusive access might not be strategically wise, Rasulo disagreed.

“We don’t think utilizing the different means of [content] distribution out there today are in conflict with each other. As a content company, it’s our job to figure out how to meet the consumer desire toward the distribution capabilities that are out there,” he said.

The executive said recent Netflix original series “Daredevil,” the first of four Marvel-based shows ABC Studios and Marvel is creating for the SVOD service, is attempting to replicate on TV what Disney has achieved at the box office with The Avengers and related franchises.

“Every piece of content has its medium,” Rasulo said, adding that Disney has “an embarrassment of riches,” when it comes to distributing its intellectual property, including on cable, satellite, telecom and owning a stake in Hulu.

“We decided Netflix was the best home,” he said. At the same time, Rasulo say there exists Disney content — notably live sports and network TV — that he believes should continue to “live” among MVPDs.

“I don’t think we’re looking back with regret [at the Netflix deal],” he said. The CFO said the evolving TV landscape underscores the importance of looking at the long-term value of content. And while Rasulo says Starz remains the way to reach consumers in the pay-TV window, that channel “is starting to evolve.”

“What Netflix was [in 2012] when we made that decision was probably a riskier decision than if we had to make that decision today,” he said. 


About the Author: Erik Gruenwedel

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