Dive Brief:
- Disney has banned Netflix ads from running across its television networks, according to a report in The Wall Street Journal. The news comes as the streaming wars heat up in advance of Disney launching its own streaming network called Disney+, which is scheduled to arrive in November with a monthly subscription price of $6.99.
- Disney originally planned to ban all ads from any competing streaming services, but after reviewing business relationships updated the rules to only exclude Netflix, the Journal revealed. Netflix does not currently advertise on Disney's channels, so it is unclear how the streaming service will be affected by this decision.
- Netflix spent $471.7 million on ads in the first half of 2019, according to a report from MediaRadar, representing a 6% drop from the prior year.
Dive Insight:
Disney's move to keep Netflix from advertising on its networks is the latest in a series of aggressions among streaming services as competition heats up in a space long dominated by Netflix. If other networks were to take a similar stance, Netflix's ability to acquire new customers could take a hit, the Journal reported, based on comments Netflix made in its annual report.
A surge in advertising dollars related to streaming services is expected in the months ahead. In addition to Disney+, the list of new streaming services in the works includes AT&T's WarnerMedia, whose ad budget to support the launch of HBO Max could reach $300 million, per the Journal. Other services debuting soon include Apple's TV+ and Comcast's Peacock, which the Journal reported could be supported with approximately $100 million in ads.
With more consumers watching streaming services, the CTV landscape is getting more competitive as media companies chase brands' advertising dollars. Recently, Amazon and Disney locked horns over Amazon's demand to sell a large percentage of the ads that run on Disney streaming apps available via its Fire TV portal. If an agreement isn't reached, Disney could withhold some of its apps from Fire TV, which could hurt Amazon as its customers would not be able to access popular content on ABC, ESPN, Disney Channel and potentially Disney+.
The Netflix and Amazon news, taken together, suggest Disney is has a lot riding on Disney+ and is willing to play hardball to protect its interests.
