For some new subscribers to Disney Plus, there’s an extra cost to getting the ad-free streaming service: A commercial.
Consumers signing up for the much-anticipated Disney streaming-video outlet will see an offer to take out a similar subscription to Starz’ own over-the-top offering, according to a person familiar with the matter. Disney Plus still plans to offer its content – which ranges from a new “Star Wars” series to old Disney classics like 1975’s “The Apple Dumpling Gang” – without any commercials.
The unorthodox arrangement puts a spotlight on the continued importance of distribution deals to the modern media industry. Disney is giving Starz access to its stream of sign-ups because Starz had previously controlled rights to a range of Disney properties, according to the person familiar with the situation. Starz had rights to run some of the company’s recent “Star Wars” films. A re-negotiated content licensing deal gives Disney control over the Starz-licensed programs earlier than under a previous agreement.
Many media companies are trying to claw back rights to run some of their most popular library programming. NBCUniversal earlier this year announced it would take back control of “The Office,” the popular sitcom that has found digital fans on Netflix – but not until 2021. The company is expected to launch its own Peacock streaming-video service next year. WarnerMedia will take back sole oversight of “Friends,” which had also been available on Netflix.
Starz could probably use the introduction to potential Disney Plus customers. The Lionsgate-owned pay-cable outlet is in danger of being dropped by Comcast. One of Comcast’s concerns about Starz is that its broadband service carries a different cost for subscribers than its cable network.
Customers who previously signed up for Disney Plus will not see the Starz offer, the person said, and those who have seen it once will not continue to be presented with it.