Disney and Netflix talk Star Wars and Marvel films rights (DIS, NFLX)

Box Office 2016

This story was delivered to BI Intelligence "Digital Media Briefing" subscribers. To learn more and subscribe, please click here.

Netflix and Disney are in discussions on whether the streaming service will retain Disney’s Marvel and Star Wars films after 2019, Reuters reports. Netflix currently has the first and second installments of the Star Wars trilogy in its catalog and has a multi-year deal with Marvel for certain series including Daredevil and Jessica Jones.

The news comes on the heels of Disney’s major announcement to launch its own Disney streaming service and end its distribution agreement with Netflix for streaming of new Disney releases, both beginning in 2019.

Marvel and Star Wars films are very popular, and keeping them would help Netflix. Marvel films have been successful at the box office for almost a decade, and are the reason other film studios are mimicking their model, according to Collider, while no other entertainment franchise matches the estimated $42 billion total of Star Wars ledger, according to Telegraph. Retaining these films can help Netflix attract and retain subscribers, which is especially important as losing Disney’s catalog in 2019 will likely lead to family subscriber losses.

But keeping Marvel and Star Wars films on Netflix could be beneficial to Disney as well. Disney is considering launching standalone streaming services for Marvel and Star Wars. However, consumers may start to feel inundated with streaming service options, and might opt not to sign up for the possible Marvel and Star Wars streaming services altogether. By keeping this content on Netflix, Disney can still monetize from licensing agreements, rather than investing additional capital into streaming services that users may not sign up for.

Regardless, Netflix’s original content still positions it well to attract subscribers. The streaming giant won’t be left completely vulnerable should it not secure the Marvel and Star Wars rights. Its $6 billion original content budget and planned 1000 hours of planned content for 2017 is sure to provide ample original programming for viewers to watch. Additionally, Netflix has proven it can develop quality content — it received 91 emmy nominations for its programming in July. Moreover, shows like House of Cards and Stranger Things have strong fan bases that drive viewers to seek out and view on Netflix, more so than Marvel and Star Wars content.

This story was delivered to BI Intelligence "Digital Media Briefing" subscribers. To learn more and subscribe, please click here.

Join the conversation about this story »