Netflix needs to make more of its own movies with Disney's exit
While Netflix is still in a deal with Disney's Marvel Studios for years to come, it needs more original programming
Los Angeles
WALT Disney Co's break with Netflix Inc increases pressure on the streaming service to produce more of its own programmes and shore up its movie catalogue as other media companies withhold their most valuable TV shows and films.
Disney is the largest supplier yet to withdraw programming from Netflix, which has morphed from friend of Hollywood to rival in the past few years. Scripps Networks Interactive Inc opted not to renew deals giving its shows to Netflix, while executives at 21st Century Fox Inc and Time Warner Inc have said they'll reduce sales to the streaming service. "Monolithic, global exclusive deals with Netflix are troublesome," Fox co-chairman Lachlan Murdoch said on Wednesday on a call with analysts. "And we think that there's a broader marketplace for us to license into." For all of Netflix's success with original series such as House of Cards and Stranger Things, the vast majority of the US$6 billion it spends on programming this year will be to buy TV shows and movies made and owned by other companies - often competing media giants. But an ever greater portion has been earmarked for exclusive series, and more recently, feature films. "Losing Disney movie output doesn't necessarily have any visible impact on subscriber growth, as long as the entirety of the service is a good value proposition to consumers," Todd Juenger, an analyst with Bernstein Research, wrote in a note on Wednesday. Investors were initially alarmed, with the stock falling as much as 4.7 per cent. The shares mostly recovered and closed down 1.5 per cent on Wednesday in New York at US$175.78. Netflix is up 42 per cent this year, compared with 11 per cent for the S&P 500 Index.
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