Everybody wants to be Netflix (Nasdaq: NFLX ) these days. Given the company's recent breathtaking results and recession-resistant shine, I can't say that I blame them.
Family entertainment giant Disney (NYSE: DIS ) became the latest company to ponder a Netflixesque model. Speaking at Deutsche Bank's 17th Annual Media and Telecommunications Conference in Florida this week, CEO Bob Iger proposed a Disney-centric offering. According to Reuters, Disney's subscription-based online rental plan would allow Disney fans to "access content from Disney's massive film and TV library by mail or online delivery."
Oh, I saw this coming.
"What is to stop the movie studios from cutting out the middlemen in the future?" I asked two years ago, when Netflix was first dipping its feet into digital delivery:
There are obvious reasons why studios never built out retail chains to push their movies. It's cheaper and easier to reach more people by stuffing every retail channel possible. That is not a roadblock to digital delivery. Sure, the studio will want in on every digital-distribution outlet available initially, but it's really just a matter of time before they want a direct line from content creator to connoisseur.
This doesn't mean that I think Netflix is doomed, or that Disney will strike it rich with such a service. Consumers aren't about to cherry-pick between studio-specific subscriptions, as long as companies like Netflix, Blockbuster (NYSE: BBI ) , and Apple (Nasdaq: AAPL ) offer them the full selection of cinematic offerings. Apple succeeded in musical delivery because it was a one-stop shop, shortly after labels like Warner Music Group (NYSE: WMG ) and Sony (NYSE: SNE ) failed with their fractionalized efforts.
However, if any studio can pull this off, it's Disney, with its decades of content and family-trusted brand. It would be easy for Disney to pad a video rental service with such exclusive offerings as:
- Concert footage of its fleet of young stars, such as The Jonas Brothers, Selena Gomez, and Miley Cyrus.
- Disney Channel show episodes before they air on television.
- Live broadcasts of in-park and Disney Cruise entertainment.
- Dedicated social-networking sites and other community-building diversions.
Netflix doesn't have to be worried by any of this. In fact, Disney and Netflix memberships are unlikely to be mutually exclusive. So don't worry about Netflix. Get excited about Disney.
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