Independence day 08/08/17: The end of the streaming monopoly

The bigger picture of Disneys platform decision.

And why most commentators do not really seem to get 
the full implications of the decision yet
.

Disney sending in the streaming troopers … (Picture taken at a the shop window of one of Germanys last video stores, in the process of its final sale before shutting down in August 2017.) Picture by author.

It’s the film, that I remember. Not the platform. Last weekend, we where undecided what to watch. This being a family event, we where looking for something relaxed and funny. After browsing all the platforms at hand (Apple, Amazon, Netflix, Sky) we settled on Zootopia. A hundred something minutes later, turning off the device right after watching, I realised I could not remember what platform we settled for to see the film. Either could my wife. And, as we felt no need to check back in to answer that question due to an almost similar offer of films on all the platforms mentioned, we forgot about it.
 
 But we haven’t forgotten the film. And that is was a Disney film.

That’s part of the reason why I say that in retrospect, 08/08/2017 will be marked as another Independence Day in the history of film consumption. A real watershed moment like the very first silent film screening at a theatre. Or the creation of the blockbuster genre. I have been looking forward to this moment for a very long time already. 
 
 With the announced of Disneys Bob Iger to launch the company’s own streaming channel in 2019 and resulting from that to pull its films from the Netflix platform, finally one of the major drivers for global mainstream filmed entertainment (and like it or not, this job is still almost entirely in the hand of Hollywoods big studios) took its destiny in its own hands*. A sign that Hollywood is finally ready to cope with the digital times. And I think this will change the game like never before. 
 
 Because, for the first time in history, now the film industry really seems about to truly commit to the possibilities this thing called internet can deliver in terms of distributing their work. 
 
 Sure, this move is not a trailblazing one. The film world left the discovery tour to the Indies and the Tech world. So far, Hollywood mostly took a backseat on the ride thru the world of early streaming and downloading industry attempts. Ultraviolet — just a boon to mimic innovation. Hulu — a playground only to monetise libraries and to try things out. So, it was left up for the Tech industry giants like Apple and, later on, mostly Netflix, to own the game of online film consumption against hefty licensing fees. And Silicon Valley fell for the trick. Sean Parkers bold attempt to establish The Screening Room was the last proof on this so far. And there is reason to believe he really thought the Studios would hand him over the keys to their precious franchises. 
 
 But, turns out they all counted their chickens before they where hatched. Ignoring the fact that there was one thing pretty clear thru all these years: The “Online-Cinema”-train could never be considered really out of the station until Hollywoods big 5 (6,7,8 … — depending on how you count) would have made a real move. And I’m talking about a move like the one Iger just announced. Now, it is only a question of time until at least Warner, Fox, Sony and Universal and/or their respective owners will follow suit. 
 
 No doubt, Reed Hastings, a clever man as he is, did see that coming. And while the world was (and still is) celebrating him as a tech mogul, he does his best to establish himself as a studio mogul instead. Because, yes, technical solutions become a commodity eventually. Thats why he makes Netflix invest billions and billions of dollars into something other tech moguls still think, they can consider second best at the most: Content brands, IPs. Hastings seems to be well aware that especially in the world of fictional filmed entertainment, the eyeballs are where the emotion is. And the emotion is where the best IPs are. In other words: Netflix has to become an IP driven company to survive in the long run. And, but thats only my personal opinion, I have no proof for that, I think Hastings is well aware of a very unique aspect of Hollywood history, business people strangely enough tend to ignore, once they deal with Tinseltown: Hollywood super-hero qualities in collecting money for their own good but leaving the same donors they praised on Monday far behind by the following Wednesday if useful. Money spend, off to new beginnings. So I wouldn’t wonder if we found Netflix being left behind as well in a couple of years. An empty platform, striped of Billions of dollars, now in the coffers of Hollywood Hill mansions. Despite all the efforts they now make to attract top talent. Once the money is gone, the talent will follow suit. It’s among the biggest privileges of talent to do so. (If you contest me on this: Make a note to follow Shonda Rhimes further career developments and we talk about it again in — lets say — ten years … ?!)
 
 No doubt, so far Netflix is alive and kicking butts. But, when it comes to measure the success of their own content creations and IPs, with no truly comparable viewing data made available by the company to the outside world we can only guess on this. And my guess is that Netflix still relies more on the content they license from the outside (e.g. Disney etc.) then they want us to believe. Why else this feverish spending spree on all sorts of content, trying things out at full speed, almost day after day? They search for, they want, they need their very own “Game Of Thrones”. Better yesterday then tomorrow. 
 
 Speaking of GoT: This new world order of film access online approaching soon is not only an issue for Netflix. Disneys move will affect Apple TV as well as Sky, HBO and even Amazon and all the others in the Online-Film- and streaming space. From 2019 on, they all will have to sit on the sidelines, watching Disney releasing the next Star Wars, the next Marvel, the next Pixar film on their own platform first. Essentially, reducing all the other platforms to places for second or third run tiers and catalogue exhibition of such IPs.

(On top of things, Netflix is so far locked in the 9,99 flat rate trap and there is the AT&T/Time Warner merger on the horizon … Exciting times ahead in the online film space).

Disney is doing the right thing. It is in their best interest. It is, with all the knowledge we have access to by today, the best move they can make to secure the future of the company. Disney has deep pockets to play this game long, as they can probably cover the costs of running the platform from Donald Duck, Mickey Mouse and other children programming alone already (Frozen, The Lion King, Cars, Toy Story etc. etc.) Not to mention again the attractive mainstream tentpole franchises they own. Plus they have a lot of experience in running platforms (Disney Channel!) and there is a lot of potential for in house cross promotion, thanks to their global network of theme parks and all the product licensing out there. 
 
 But, after all, they have to do it as it is time to do so since a while already. As the internet finally made it possible to create a truly global pipeline to distribute content IPs. The online infrastructure is perfectly build for such ventures, maybe even more, then for all the middle-man-platform-businesses the industry was dealing with since our economies shifted to the interconnectedness we already take for granted in the Western world today. And, looking into the future, there is the Blockchain on the horizon. A technology, that will definitely offer new direct ways for storytellers to connect with their audiences and to ask them about compensation in return for their entertaining talents. Given that even a giant company like Disney is in the end just a storyteller, I think Igers move at exactly this time is the right thing.

There is no doubt that in the film world the future is with those who tell great stories AND own their audience. ( … AND … !)

Btw, Zootopia is a great animated adventure full of lovely animals. Fun to watch, beautifully designed characters speaking nice lines, awesome details to look at, great story world. All in all a very nice film to see, that got us emotionally engaged. We will remember it for a long time, if not forever. Unlike the tech backend that delivered the emotion to our sofa.

*They will also launch their own streaming platform for ESPN in 2018 . But thats another story.

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