Has the Net­flix vs Dis­ney stream­ing war already been won?

In 2011, Net­flix announced that their stream­ing divi­sion would sep­a­rate from the DVD rental busi­ness on which the com­pa­ny was built. Stream­ing had emerged as a viable mod­el due to increased broad­band speeds. Net­flix secured licens­ing agree­ments with stu­dios and chan­nels, real­is­ing that users were agnos­tic and only inter­est­ed in which ser­vice pro­vid­ed the best content.

They realised that secur­ing exclu­sive stream­ing rights to shows like Orphan Black wasn’t as depend­able as pro­duc­ing orig­i­nal con­tent. Switch­ing focus to Net­flix Orig­i­nals guar­an­teed exclu­siv­i­ty and greater prof­it mar­gins. That ini­tial announce­ment felt pret­ty jar­ring at the time, but Netflix’s orig­i­nal pro­gram­ming has been a key fac­tor in them monop­o­lis­ing the stream­ing market.

The stream­ing war tru­ly began in August 2017 when Dis­ney announced an end to their 2012 deal, stat­ing that they will remove video con­tent from Net­flix in 2019. Net­flix stock dropped in the wake of the announce­ment. They were pre­pared for a sit­u­a­tion like this, hav­ing built a respectable bank of orig­i­nal con­tent. In antic­i­pa­tion of Disney’s move into stream­ing, Net­flix is dou­bling down on its own orig­i­nal con­tent, announc­ing an $8 bil­lion con­tent bud­get for 2018 to keep their 117.6 mil­lion glob­al sub­scribers loyal.

Details of Disney’s stream­ing plat­form remain hazy but we know it is sched­uled for launch in late 2019, and will fea­ture every­thing Dis­ney puts into cin­e­mas from 2019 and beyond. Cru­cial­ly this means future the­atri­cal releas­es from Mar­vel, Pixar and Lucas­film – titles slat­ed so far include Avengers 4, Frozen 2, Toy Sto­ry 4, Star Wars Episode IX and live-action adap­ta­tions of Aladdin, Lion King and Dum­bo. Ter­ri­ble news for any­one who’s already com­plain­ing about fran­chise fatigue, but Dis­ney CEO Bob Iger’s plan to include a new Star Wars TV series, along with adap­ta­tions of High School Musi­cal and Mon­sters Inc, seems a shrewd one.

The ser­vice will launch in the US before expand­ing glob­al­ly, and Dis­ney is keen to keep the con­tent fam­i­ly-friend­ly. They could poten­tial­ly house the more adult-titled con­tent on Hulu, of which Dis­ney owns a 60 per cent major­i­ty stake. As not­ed in The Verge, Dis­ney intend to cre­ate a 360-degree ​“holis­tic ecosys­tem of enter­tain­ment, all under one cor­po­rate umbrel­la.” This unprece­dent­ed lev­el of cor­po­rate con­trol means we could watch a new Star Wars film in the cin­e­ma, then go home and stream episodes of the TV show. Head­ing to Dis­ney­land? There’s plen­ty Star Wars rides along with books and comics all offi­cial­ly licensed of course.

Under Iger, Dis­ney has made a habit of acquir­ing lucra­tive prop­er­ties in mul­ti-bil­lion dol­lar deals; Pixar in 2006, Mar­vel in 2009 and most recent­ly Lucas­film in 2012. The returns have been astro­nom­i­cal – Dis­ney films cur­rent­ly account for five of the 10 high­est gross­ing movies of all-time. This would rise to six if their $52.4 bil­lion acqui­si­tion of Fox goes through as expect­ed, while each Mar­vel film aver­ages $840 mil­lion at the glob­al box office.

Net­flix may be will­ing to invest in high-qual­i­ty orig­i­nal pro­gram­ming, but Dis­ney has 75 years of cul­tur­al cap­i­tal in the bank. But the real con­cern for Net­flix right now is Iger’s state­ment that Disney’s stream­ing plat­form will aggres­sive­ly under­cut Net­flix. To fund their plans for 2018 and beyond, Net­flix has already increased their sub­scrip­tion fee, effec­tive­ly pass­ing the cost on to the consumer.

Dis­ney, mean­while, can afford to run a cheap­er ser­vice thanks to the insur­ance pro­vid­ed by var­i­ous oth­er rev­enue streams, includ­ing ABC, ESPN and a host of theme parks. The Fox acqui­si­tion would bring even more rich­es to Dis­ney, with own­er­ship of pop­u­lar fran­chis­es like The Simp­sons, Die Hard and Plan­et of the Apes on the hori­zon. This com­bi­na­tion of clas­sic and future con­tent is Disney’s ace card; they may have already won the stream­ing war with­out a shot being fired.

Jack Kavanagh is the edi­tor of Cul­ture Hash, a blog on pop­u­lar cul­ture and music.