Why Disney's Investment in Hulu Won't Hurt Netflix

With Walt Disney (NYSE: DIS  ) participating in a fresh $750 million investment in Hulu, Netflix (NASDAQ: NFLX  ) shareholders might be wondering if the House of Mouse will loosen ties with the streaming king. Hulu and Netflix are longtime rivals, after all.

Yet a parting of the ways is unlikely, says Fool contributor Tim Beyers in the following video. Why? Netflix and Disney already have an exclusive deal for films in 2016 and beyond. Until then, both Netflix and (NASDAQ: AMZN  ) have access to Disney via fare through arrangements with Epix, a Viacom (NASDAQ: VIAB  ) service that grants access to films distributed by Paramount Pictures no earlier than 90 days after release.

If there's a reason for investors to be fearful, Tim says, it's not the investment in Hulu but Disney's buyback of Paramount's distribution rights to Marvel Studios films Iron Man, Iron Man 2, Thor, and Captain America: The First Avenger. Epix and its customers should no longer have streaming access to those films.

Fortunately, that's entirely the case. Both Amazon and Netflix were streaming Thor and Captain America, as well as Marvel's The Avengers, as of this video. Iron Man and Iron Man 2 must either be rented or purchased, Tim says.

Meanwhile, just like Star Wars, Marvel films screened between now and the end of 2015 -- and that includes Avengers 2 -- are unlikely to show up at Netflix or Amazon. Disney's investment in Hulu isn't a factor. Instead, the company, now free of its ties to Paramount, will need only to honor its agreement with Starz.

Now it's your turn to weigh in. Do you care about Disney's investment in Hulu? Does knowing there will be a gap in Netflix's Marvel coverage matter in your investment thesis for the stock? Please watch the following video to get Tim's full take, and then leave a comment to let us know what you think.

And remember that the war for your living room is much bigger than Disney and Netflix. As much as $2.2 trillion is at stake in a battle that pits cable companies such as Cox, Comcast, and Time Warner against technology giants such as  Apple, Google, and Netflix. The Motley Fool's shocking video presentation reveals the secret Steve Jobs took to his grave and explains why the only real winners are these three lesser-known power players that film your favorite shows. Click here to watch today!

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Related Tickers

9/29/2016 4:00 PM
DIS $91.80 Down -0.40 -0.43%
Walt Disney CAPS Rating: *****
NFLX $96.67 Down -0.81 -0.83%
Netflix CAPS Rating: ***
AMZN $829.05 Up +0.33 +0.04% CAPS Rating: ****
VIAB $37.77 Up +1.21 +3.31%
Viacom CAPS Rating: *****