Read the issue for debate on page 196 in Chapter 6 about how Disney is diversifying in order to take on Netfii. Disney is using major acquisitions and related actions to take on the new media challenge posed by Netflix, Amazon, and other streaming services. In taking charge of its own distribution and by purchasing 21 Century Fox, Disney has taken bold actions to become a broadly diversified, vertically integrated media player. What is unclear is whether customers will see enough value to sign up for Disney’s services. Disney is restructuring its media and entertainment divisions.
Discuss these questions.
- Is Disney making the right decision to develop its own exclusive streaming system rather than using Netflix and other streaming services to deliver its content?
- Is the defection of Disney, Warner Bros., and Comcast from Netflix’s streaming services going to seriously harm Netflix?
Solution
Week 3 Discussion
Disney has made the right decision to develop its own exclusive streaming system rather than using Netflix and other streaming services to deliver its content because if Disney develops its own streaming system, it can able to connect with more people and will be able to compete with the other competitors like Netflix and Amazon (Boguszewicz-Kreft et al.,2019, p.25). Using its own streaming system will help Disney in having a comparative advantage and even expand their business. Disney competes with Netflix and Amazon in developing the movies and the series and the Disney has large consumers who are loyal to the channels and always connect with the channel for the new series and movies so Disney should not collaborate with any of the other competitors in the market.
The defection of Disney, Warner Bros., and Comcast from Netflix’s streaming services are going to affect Netflix in the following way-
Firstly Netflix has more streams than any of the competitors with more content. Also it can be that Disney is a good competitor and has its own streaming system which will cause a shift in the viewers’ focus and eventually affect its market shares. (Trusheim et al., 2018, p.1977).Secondly, Disney and Warner Bros are in this industry for longer times and therefore they will attract more customer than Netflix because Netflix has come to the market recently and there is basically more loyal customer of Disney. Netflix has even lost 20 percent of the total content library in the programming which can be considered as a great loss.
References
Boguszewicz-Kreft, M., Kreft, J., & Żurek, P. (2019). Myth and Storytelling: The Case of the Walt Disney Company. In Myth in Modern Media Management and Marketing (pp. 22-49). IGI Global.
Trusheim, M. R., Cassidy, W. M., & Bach, P. B. (2018). Alternative state-level financing for hepatitis c treatment—the “netflix model”. Jama, 320(19), 1977-1978.
