Content Owner Holds All the Cards, Shooting the Moon
Disney is demanding fair value to stream movies online. You have no doubt heard that Disney and Liberty Media Corp, whose premium cable brand includes online service Starz Play, are currently re-negotiating their contract.
Starz seeks access to Disney films for as many as five years on its cable channel, as well as continued digital rights, said the people, who asked not to be named because the talks are private. Disney wants viewers watching Starz movies online through companies such as Netflix to pay more for what the studio considers a premium channel.
The digital rights are part of contract talks that may also determine how much Starz pays Disney and whether films from director Steven Spielberg’s DreamWorks Studios will be included, one of the people said. Netflix depends on Starz for access to movies including “Wall-E” from Disney’s Pixar, and without it the video-rental service would have to reach an agreement directly with the studio, the world’s biggest media company.
Starz Play is available to Netflix subscribers, as well as Starz cable subscribers. Disney has seen Warner Bros. complete a new deal directly with Netflix and wants bigger fees from Starz. Starz rights to stream Disney films are set to expire in 2012 and may be perceived as double dipping by re-selling its service to Netflix.
Netflix has been cast as the odd man out in Disney’s talks with Liberty, but its recent deal with Warner proves a willingness to trade an increase window for lower costs, a strategy it announced late last year. And now, thanks to adding Nintendo Wii as the latest Watch Instantly device, even if it doesn’t plan on supporting Netflix HD in any near time frame, Netflix should have a windfall of new subscribers to use as leverage.
There is no reason to think a deal between Disney and Netflix won’t get done, they have an existing agreement for TV Shows after all. But Netflix needs to negotiate carefully. Disney is the largest media company and Netflix needs them more than the other way around.
Disney movies are offered for rental and purchase on a number of internet appliances and online video services
And Disney is getting an online video service of its own ready as part of their pay once, play wherever strategy: Disney KeyChest. For those unfamiliar with the technology recently demonstrated at CES, Video Business describes it below:
Existing in a ‘digital cloud,’ KeyChest acts as a rights repository for legally purchased content. People would enter in their unique identifying information attached to a purchased title on any Keychest-compatible device and also enjoy immediate access across any other compatible device.
Hopefully that will include all the Netflix Watch Instantly devices. But if it does not, there will be another class of devices Disney does intend to target with its service. A fellow believer in the pay once, play wherever philosophy. Perhaps lost in the CES shuffle, DECE, the Digital Entertainment Content Ecosystem, reached a major milestone last week:
There will soon be an exciting new way to buy, access and play digital entertainment. Developed by the Digital Entertainment Content Ecosystem (DECE), a coalition with support from every industry involved in digital entertainment, this new system will provide a revolutionary new way to enjoy your favorite movies, TV shows and other entertainment.
DECE has an ambitious goal of allowing consumers watch legally purchased digital content anywhere they wish, while protecting the content owners rights against piracy and the such. Upon reviewing the DECE‘s approved Digital Rights Management (DRM) schemes you may notice Apple’s FairPlay is not on that list. Steve Jobs explained his thoughts on music DRM way back in 2007. KeyChest is not on the list because as Engadget explains KeyChest is not DRM and actually complementary to DECE.
Disney is offering a sneak peek of its new movie experience, offering loyalty rewards members the opportunity to watch certain Disney and Pixar titles online. Movies available for online viewing include:
- Monsters Inc.
- Bedtime Stories
- The Nightmare Before Christmas
- Hannah Montana: The Movie
- Jonas Brothers: The Concert Experience
You will need:
- Disney Movie Rewards Program account (any existing Disney credentials, such as ESPN, will work)
- Digital Copy code from your BD Combo Pack
- high speed internet connection