Internet streaming service adopts long-term contract
A lot has happened since the last issue of The Knight was released. Christmas, and all those other winter holidays that we Catholics don’t pay attention to, has come and gone; a new year has begun; and the teams going to the Super Bowl have been revealed (I didn’t even have to ask the sports editor who they are).
But one very significant thing happened over break that deserves some coverage – well, all of the coverage – in this column.
Stop the presses. Netflix has signed a contract with Disney.
Horrible news junkie that I am, I first found out about this deal from a friend. We were enjoying a couple of mojitos at Max ‘n Erma’s after finals week when he casually mentioned that all my hopes and dreams would be coming true.
I mean, he didn’t say it like that, but I swear the room got a little lighter and angels were fluttering all around. Maybe it was the mojito.
The important thing here is that my favorite Disney movies – old and new – are coming to my favorite streaming service. In fact, some are already there.
It really is a match made in heaven.
According to the Associated Press, it all started when Starz and Disney couldn’t come to an agreement with the renewal of their preexisting contract.
Currently, all Disney movies are released to the Starz cable network after their run in theaters. They usually start showing on TV about seven months after they’ve left theaters, and they run fairly regularly for about 18 months. The contract with Starz expires in 2015.
Before news about the trouble in paradise caught on, Netflix snatched the deal from Starz. So, starting in 2016, Disney’s new releases will be sent to Netflix – and only Netflix – for Internet streaming. Netflix will not have the Disney movies available on DVD, and the movies will not be on premium cable during the time Netflix has them.
As much as I love the idea – and I really, really love it – something’s telling me this isn’t going to work out so well for Netflix.
Though the companies wouldn’t release the financial terms when the deal was secured in December, experts suspect that Netflix will pay Disney something like $350 million annually for this perk.
Woah. Does Netflix really have that kind of cash on hand?
The Associated Press reports that Netflix owes $5 billion in licensing fees – before the Disney acquisition – within the next five years.
By the end of September, Netflix had 25.1 million Internet streaming subscribers paying $8 per month for streaming. Now I’m no whiz with numbers – and of course there are other sources of revenue, like stock, to consider – but it doesn’t all add up.
At the end of the day – or, in this case, five years – Netflix won’t be able to pay its bills, which means subscribers’ bills will probably go up.
Remember the last time Netflix tried to raise its prices? It didn’t go over so well.
But I guess the real point is that they promised not to do it again. Oops.
I’m not particularly keen on paying more for less, but as virtually all other rental services are depleted, by 2016 it could be the only option.
Unless, of course, Disney buys Netflix.
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