Credit: Inside the MagicDisney has finally cemented a huge new streaming and broadcast deal and pledged to stop raising rates for streaming services.
The Walt Disney Company has fully committed to streaming media, jumping headfirst into war with Netflix, Amazon Prime Video, Max (then HBO Max or maybe HBO Now or possibly HBO Go; they’re pretty all over the place), Apple TV+, and all the rest in 2019. Since launching Disney+, the Mouse has struggled to actually compete in a marketplace that, it turns out, is way more difficult to monetize than it thought.
Disney and its rivals like Warner Bros. and Paramount got into the streaming game more out of FOMO and envy of Netflix‘s dominance than actually thinking things through, and it has been coming back to bite them in the butt.
After promising consumers a rock-bottom monthly subscription price and no ads, the company has slowly started to realize that means it’s no longer selling DVDs and Blu-Rays at the same rate it once did, people wait for movies to drop on streaming instead of buying tickets, and subscribers are way more touchy about ads than they were when you had to watch commercials on the Disney Channel.
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So, after increasingly dismantling its physical media production and backtracking on commercials, Disney is trying to make streaming work on monthly fees alone. It’s not going so great, especially after Venu Sports, the company’s team-up with Warner Bros. Discovery and Fox to create a monopolistic (allegedly!) sports streaming app was shut down by U.S. District Judge Margaret Garnett.
Regarding Venu’s high probability of cornering the sports market and then raising prices on consumers once there was nowhere else to go, Judge Garnett said, “American consumers do not have to simply take their word for it and hope for the best.” Turns out that wasn’t the only big antitrust issue that Disney had to deal with lately, but they actually made some concessions outside of America.
Per BBC, Disney has finally managed to sign a deal with Reliance Industries, India’s largest corporation, to form a joint venture that will utterly dominate the country’s media landscape.
Reportedly, in order to get the $8.5 billion dollar deal done, Disney made concessions that included selling off seven to eight broadcast television channels (as Inside the Magic previously covered) and a pledge not to raise advertising rates for commercials during cricket matches.
That second part is hugely important because televised and streaming cricket matches are an enormous part of the media landscape of India, the single largest consumer market on the planet.
The Disney-Reliance Industries merger (per Reuters) will allow the new joint venture to control the “[broadcast television] and streaming rights for the Indian Premier League (IPL), T20 World Cups and matches held by the International Cricket Council” as well as “Wimbledon, MotoGP and the English Premier League [EPL].
Nita Ambani, wife of Reliance Industries chairman Mukesh Ambani, will chair the new joint venture. Former Disney Star executive Uday Shankar will serve as vice chair.
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The deal between Disney and Reliance Industries was being heavily scrutinized by the Competition Commission of India (CCI) because of the monopolistic implications of, say, one of the world’s most powerful and vertically integrated entertainment companies in the world going into business with the country’s omnipresent energy, petrochemicals, natural gas, retail, entertainment, telecommunications, mass media, and textiles giant.
However, it turns out that’s not a big issue for governmental watchdogs as long as you (checks notes) promise not to raise advertising costs very much for companies to promote themselves during cricket matches. We’ll have to see how this works out for the consumers in India.
Do you think that it’s okay for two huge companies to control virtually all sports broadcasting in a country?