Netflix Won’t Get Future ‘Star Wars,’ Marvel Films — And Streamer’s Investors Shrug

Netflix Won't Get Future 'Star Wars,'
Courtesy of Disney

No Iron Man, no Chewbacca — no problem?

Netflix will not get Lucasfilm’s “Star Wars” or Marvel Entertainment films beginning with 2019 releases. And the streaming-video leader’s investors have issued a collective “so what?”

Shares of Netflix were up about 0.1% in midday trading from the previous closing price of $179.25 per share, after Disney chief Bob Iger said the “Star Wars” and Marvel franchises would be on Disney’s own streaming service slated for late-2019 debut. Previously, Disney had left the door open to the possibility that streaming rights to those movies would be licensed to Netflix or another third party.

Part of the muted reaction from Netflix investors is likely because investors were already bracing for the impact of the Mouse House pulling back Pixar and Disney titles: Netflix’s shares dropped 7% the week following Disney’s over-the-top announcement last month.

And while Netflix was still hoping to reach a new deal for “Star Wars” and Marvel pics, Wall Street wasn’t pinning its hopes on that happening. The upshot is that Netflix, at this point, is big enough that the loss of a single partner — even a name-brand one like Disney — isn’t enough to rock the boat.

At the same time, Disney shares fell as much as 5% Thursday, coming after Iger’s comments that earnings would be flat for fiscal 2017. Analysts said investors were mainly concerned about the long-term health of the pay-TV business — and also skeptical about Disney being able to pull off a win with the direct-to-consumer gambit.

In the grand scheme of things, the Disney movie output deal has represented only a fraction of Netflix’s overall content spending. Under that pact, Netflix pays about $200 micllion per year to Disney, analysts estimate — which is around 3% of Netflix’s total projected content budget of $7 billion for 2018.

Netflix has been prepping for the day when Hollywood studios launch SVOD competitors, stocked with their own content. “We started making original content five years ago, betting this would happen,” Netflix chief content officer Ted Sarandos told Variety in a recent interview.

Indeed, Netflix has made some big moves just in the past month on the original programming front. It made its first acquisition, comics publisher Millarworld (behind such titles as “Kingsman” and “Kick-Ass”), and struck an overall TV deal with Shonda Rhimes — poaching her from ABC Studios. Last week, Netflix announced a pact with Oscar-winner Damien Chazelle for “The Eddy,” a Paris-set musical drama series marking his first foray into TV.

Netflix and Disney originally inked the licensing pact for the U.S. pay-TV window in 2012, under which Netflix secured streaming rights to the Mouse House’s films starting with 2016 releases. Netflix has had a similar “pay one” agreement for Disney titles in Canada starting with 2015 releases.

Meanwhile, separately from the Disney movie pact, Netflix has a multiyear deal with Marvel for original series based on Marvel’s street-hero characters, including “Daredevil,” “Jessica Jones,” “Luke Cage” and “Iron Fist.” Those shows have been among the most original programming on Netflix.

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  1. Jack Black says:

    Maybe rewrite the article and headline to reflect this idea: Netflix WILL get future Marvel, Star Wars movies on Blu-ray… just not streaming, at least not right away.

  2. Jep Champion says:

    So they lose some popular movies for a few years. Netflix will get them back eventually, if it cares enough to want them. Face it, Disney. Netflix has market share. You’re too late to the party and don’t have enough content to offer to interest serious subscribers. People subscribe to your cable channel because it’s a cheap babysitter. Turn it on and forget the kids unless there’s screaming or the smoke alarm goes off. A streaming service requires too much interaction to fill this role. Even if the kid only wants to watch Frozen over and over again you’re still going to have to start it for her every time. Making your content exclusive is just going to limit your market in the long run. It’s not like you still have The Wonderful World of Disney to appeal to network TV viewers. And it’s not like anyone watches network TV anyway.

    • Bob McBobson says:

      Exactly. Disney has no shot to supplant Netflix at this point. Their best hope is to be the Hunt’s ketchup of streaming.

  3. john franz says:

    I don’t see myself subscribing to Disney. Most people don’t want to watch the same old movies over and over and over. How many times do I want to see Star Wars or Toy Story? I think most of us cable cutters want new programming. Is Disney going to have new programming available only on their service? I’ll stick with Netflix and HULU and Amazon Prime.

  4. jsc315 says:

    This is exactly how you get people to pirate your content but making it more difficult to get to an over saturating the market. Sure Disney has a huge catalog but still very limiting. I am already signed up for 5 different services, I don’t need to have another service I have yet to remember to log into to get specific content.

  5. Fuzzy Bunny says:

    About the last thing I’m ever going to do is subscribe to yet another streaming service.

    • john franz says:

      Right. I cut the cable to save money. Now that I’ve been doing this for a few years I like it better than live tv or having to program a DVR. And I’m sure many people use someone else’s cable log in to access just about anything if you don’t mind watching commercials.

  6. zalamnov zipnitiopshov says:

    meh. who uses netflix for movies anyways? besides, they’ll be back, the world is getting too saturated with all these subscriptions. sooner or later we will hit a breaking point and all these monthly fees will come crashing down.

    • Harold Art says:

      Agreed. I can tell you this, I am NOT going to be paying for yet another subscription service. So sorry Disney (and any other future single producer services), you probably won’t have the breadth to bump one of my current subs off the list.

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