Disney Pulls Content From Netflix To Start Own Paid Service. Could The Same Siloing Happen In Music?

Disney is pulling much of its core content from Netflix, so that it can launch its own paid streaming service. Could this happen in music?  Universal execs say that they don't believe in "exclusive" releases on specific music streamers But what if the world's largest label group pulled all of its music off Spotify, Apple Music and their competitors to start and profit from its own paid streamer?

The idea is not that far fetched.

Read why it might – and might not work for Disney and how much it sucks for consumers. Then decide for yourself, if one of the three major labels is brave – or foolish – enough to try it.

Guest post by Karl Bode of Techdirt

On one hand, the increasing number of independent streaming services is certainly a good thing. This increase in competition is finally starting to apply pressure on incumbent cable TV providers to offer greater programming flexibility and to compete on price, even though many cable and broadcast execs falsely believe they can ignore the threat and do the exact opposite. But as everybody and their mother jumps into the streaming game, we're facing a new threat: the rise of fractured exclusivity silos that make consumers hunt and peck to obtain their favorite programs.

Case in point: if you're a fan of a particular program in the modern streaming video age, you first need to check to see if that program or film is available on any of the half-dozen services you may subscribe to, be it Hulu, Netflix, Amazon, CBS All Access, YouTube TV, or any of a myriad of other options. That in and of itself can prove fatiguing on your patience — and wallet if you're trying to save money over traditional cable. You've then got to see if that content is still actually available, since content licensing results in titles being added and removed in what are often illogical availability windows, adding another layer of confusion.

Now, things are poised to become even more complicated in that regard. Wanting to cut out the middleman, many broadcasters (like CBS, FX or AMC) are busy pursuing their own streaming services, pulling their content from existing available services and forcing users to sign up for yet another monthly subscription. For example, if you want to watch CBS's upcoming new Star Trek: Discovery TV show, your only option will be to sign up for CBS's $7 per month All Access service. Don't want or can't afford another service? Your option is to either go without — or to pirate the program. Guess which option many choose?

A more recent case in point: Disney announced this week that the company would be pulling its content from Netflix in order to launch its own streaming video service:

CEO Bob Iger told CNBC's Julia Boorstin Disney had a "good relationship" with Netflix, but decided to exercise an option to move its content off the platform. Movies to be removed include Disney as well as Pixar's titles, according to Iger. Netflix said Disney movies will be available through the end of 2018 on its platform. Marvel TV shows will remain. The new platform will be the home for all Disney movies going forward, starting with the 2019 theatrical slate which includes "Toy Story 4," "Frozen 2," and the upcoming live-action "The Lion King." It will also be making a "significant investment" in exclusive movies and television series for the new platform.

On one hand, if you really like Disney content, this may not be a horrible thing for you. On the other hand, if you're only interested in a few Disney titles but already feel you pay for too many streaming services, you could find yourself annoyed. Users are, it goes without saying, cutting the TV cord because they're tired of the poor value proposition traditional cable TV represents. It's not entirely clear you can call it real pricing evolution if you replace one bloated, giant cable bill with an ocean of smaller charges that ultimately cost you the same if not more than your old cable TV subscription.

And while it's not entirely clear how many monthly fees and subscriptions users are willing to tolerate, it is abundantly clear that broadcasters and cable companies intend to push their luck and figure out the answer. Not many seem to realize that should they push too hard and cordon off content into an ocean of annoying exclusivity silos, the end result will drive users back to the simplicity of piracy. And that's a particular shame given all the work it took to wean consumers off of file trading services like BitTorrent and on to "legitimate" monthly streaming subscriptions in the first place.

There's a fine line here as we shift from traditional cable to over the top streaming, and it's precisely the kind of line the traditional cable and broadcast industry loves to trip face-first over.