Sometime in 2019, The Walt Disney Company will launch its own streaming service. Unlike CBS All Access, Disney is moving rapidly to ensure that customers will have plenty to watch when it debuts. Of course, Disney already has a video library almost 100 years old. Additionally, its Marvel, Lucasfilm and Pixar subsidiaries are putting out content at a prodigious rate.
But, the Mouse is not stopping there. This past week saw a number of developments that hint at bigger plans. There were the public announcements, and the leaked stories. Individually, they were enough to set fans’ hearts aflutter but, when taken together, they show that Disney is serious about its streaming service’s offering.
Star Wars: A New Trilogy
As covered earlier this week, The Last Jedi writer-director Rian Johnson, will be creating a new trilogy. The official LucasFilm statement announced that these movies will be separate from the nine movie Skywalker saga. These films will “introduce new characters from a corner of the galaxy that Star Wars lore has never before explored.” LucasFilm president, Kathleen Kennedy added, “Rian will do amazing things with the blank canvas of this new trilogy.”
Star Wars production schedule is a trilogy film every other year, with a stand-alone anthology movie in between. Solo: A Star Wars Story opens May 25, 2018. J.J. Abrams’ Star Wars: Episode IX will wrap up the current trilogy when it debuts December 20, 2019. The third anthology movie hits theaters in 2020. This leaves a 2021 date as the theoretical slot for the first of the new trilogy films.
With a 2019 launch for the streaming service, Disney is able to add these new movies before they appear on cable or other services. With the traditional 90-day delay before video long since abandoned, fans could stream the new movies mere weeks after release.
Ever since 1977, fans have clamored for a Star Wars TV series. In the past two decades, they’ve been rewarded with the animated Clone Wars and Rebels series. In some ways, these are Star Wars come full circle. George Lucas has repeatedly stated that he was inspired to create Star Wars by the short, episodic serials that played before the main feature at the movie theater. Flash Gordon, Commando Cody and other science fiction tales brought in young audiences week after week to watch their heroes’ adventures among the stars.
Overshadowed by the trilogy announcement was Walt Disney Company chairman and CEO Bob Iger’s announcement that there would be a live action Star Wars series as well. It will debut on the streaming service, making it the first live-action since 1978’s infamous Star Wars Holiday Special.
Disney also announced that it would be creating series based of two other properties. Both Monsters, Inc. and High School Musical will be developed into serial stories for their streaming service. Along with the Star Wars series, these will maintain Disney’s family-friendly programming idiom. The series’ respective target audiences have a lot of overlap, giving the service a leg-up in competing for eyeballs.
Fox in the House of Mouse?
At the beginning of the week, news broke that Disney had been in talks with 21st Century Fox to purchase, among other things, 20th Century Fox studio. The deal started hitting headwinds almost immediately due to SEC antitrust regulations, but if the purchase were to go through, it would add the vast Fox movie library to the streaming service’s content. Disney would gain control of its significant TV production assets, in addition to the ones it already holds at ABC. Fox’ networks also give it significant access to international markets including the U.K., Germany and Italy. Fox’ 39% ownership of the British Satellite TV giant Sky gives it further reach.
Perhaps more importantly, it would also bring the remaining Marvel properties “back home.” Before it became a movie studio in its own right, Marvel sold off the rights to X-Men, The Fantastic Four, and their related canon to Fox. Sony received the rights to Spider-Man in a similar deal. Marvel was able to bring Spider-Man in-house in time for 2016’s Captain America: Civil War.
Meanwhile, Fox’ stewardship of its Marvel licenses has been unsteady at best. It has relaunched The Fantastic Four twice, with negative results. The various X-Men movies rival Marvel’s own MCU films in quantity and have earned a respectable $5B globally, but that pales in comparison to the total MCU box office of $13.167B. Fox did take a risk greenlighting Deadpool and it paid off immensely. Deadpool, however, would be unlikely to appear on Disney’s streaming service as Disney’s Iger has said that it will not carry R-Rated content.
On the Star Wars side, such a merger would simplify future distribution of the original trilogy films and their prequels. This would include the inevitable nine-disc “Complete Saga” boxed sets. Of course, for some Star Wars purists, it would be enough that the opening Fox Fanfare could once again be “properly” at the beginning of the movies.
Streaming Away from Netflix
When Disney first announced its intention to launch its own streaming service, it immediately raised questions about its relationship with Netflix. Originally announced in 2012, Netflix became the sole streaming option for Disney content in 2016. Soon after introducing its new service, Disney stated that Disney Studios and Pixar films would be leaving for their new home in 2019. However, the fate of the Disney-produced superhero shows was less clear. Currently, the Marvel line-up includes Daredevil, Iron Fist, Jessica Jones and Luke Cage. The team-up of these titular characters The Defenders, recently launched and The Punisher will air on November 17. While no official announcement has been made, it is becoming increasingly likely that they will relocate as well.
Disney Financial magic
Disney is making it abundantly clear that it intends to compete directly with its erstwhile partner. Moving all of its content to its own streaming service makes it a “one-stop shop” for its viewers. This makes it infinitely more convenient for a Marvel or Star Wars fan to find everything in one place. And, by having content for the entire family, it is less likely that customers will also use Hulu, Netflix or other services. The streaming service market is growing increasingly more crowded. There are currently over a dozen services including Amazon Now, Acorn, DirecTV Now and others. That is in addition to the various pay-per-view services. It is thought that this increased competition is one factor behind Fox’ willingness to sell off assets. Its ownership would rather focus on its successful news and sports properties.
Iger stated that Disney’s service will be “less costly than Netflix” which currently charges around $11 a month. Consumers are unlikely to buy too many multiple services, much less ones with duplicate content. By being affordable, and the exclusive provider of its own libraries, Disney offers a pretty good incentive to be one of the choices.
In addition to shielding itself from the ongoing trend of “cord-cutting”, Disney also gets to keep more money. Instead of having to share revenue with Netflix, they get all of the customers’ monthly subscription fee. And by owning all of the content, they do not have to pay out licensing fees to other companies. Instead, profits just flow between Disney’s various divisions. The accounting advantages of being able to bill itself for services rendered and licenses provided and write all that off their corporate taxes seal the deal.
In some ways, this is a return to the”vertical integration” of classical Hollywood. Until the middle of the last century, studios not only created and produced their own films, they also owned the theaters that they showed in. In this modern version, Disney will own the creative as well as the distribution processes with a platform that also serves to market its other products and its overall brand.
Even though it wasn’t the first in the market, Disney is clearly intending that its streaming service will be a force to be reckoned with.