What the Netflix-Disney Deal Means for You

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Netflix's deal with Disney proves online viewing has become mainstream. Find out why this could be a threat to traditional pay-TV providers and what it means for viewers.

Last week, Netflix and The Walt Disney Co. announced a new licensing agreement that will bring Disney movies to the online video streaming site starting in 2016. The deal includes Disney, Walt Disney Animation Studios, Pixar Animation Studios, Marvel Studios, and Disneynature films, and means they’ll be exclusively streamed on Netflix.

While 2016 Netflix subscribers may have it good, what does this mean for the current ones? What about subscribers for other pay-TV channels like HBO and Showtime? Will the annual $300 million bill to Disney eventually put Netflix under? Here’s what the upcoming arrangement will mean for both companies and consumers.

Why 2016?

Currently, Disney is locked into a deal with Starz that ends in 2015. Netflix outbid Starz for future rights to the titles, so it begins when the current deal expires. In February, Netflix’s streaming contract with Starz ended and many favorites, including some Disney flicks, left the service after four years together.

Netflix normally gets their titles from the major Hollywood studios, but not until long after the movies and shows have been made available to cable network providers – typically after DVD/Blu-ray releases have slowed down. This new deal means newer releases will be available soon after the films are released on DVD.

Netflix subscribers will also get to see Lucasfilm’s Star Wars franchise, which Disney acquired earlier this year. While the next Star Wars release is set for 2015 and Starz will have the rights, all films released thereafter will be available on Netflix.

What does it cost?

No official financial disclosure from the deal has been released but it’s valued at roughly $300 million per year. To justify the cost, analysts say Netflix will have to add an additional 3.7 million subscribers annually.

What about right now?

While you may have to wait a couple of years to get major titles faster, Disney and Netflix reached a separate deal to bring some older films to the streaming service immediately. Look for classics like Alice in Wonderland and Pocahontas. Direct-to-video movies will be available on Netflix starting next year.

The exclusive rights deal is great for Netflix users, but not so great for other pay-TV channel subscribers. This now makes Netflix a direct competitor to traditional channels like HBO, Showtime, and Starz. It’s also bad news for Amazon Prime and Comcast users, who may have to pay an extra $8 a month on top of their cable provider bill to access the Disney collection.

If the expenses are too high, see how to cut down your cable bill while still watching your favorite movies and shows.

Stacy Johnson

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