Disney Bans Netflix Ads

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https://www.nytimes.com/2019/10/04/business/media/disney-netflix-advertising.html

The streaming wars are heating up. With the arrival of Disney Plus launching in November, Bob Iger and Co. are not playing games, and that means banning companies like Netflix, who can longer distribute ads across their entertainment networks, such as ABC or Freeform.  

As more entrants are looking to advertise in traditional television, Netflix is unable to rely upon subordinate business units to advertise its own brand. In terms of targeting a varied audience, Netflix will now have to find other entertainment outlets to market content. Unfortunately for Netflix, a sizable portion of their marketing share was spent on Disney related advertising. In 2018, the company spent about $1.8 billion on advertising last year, about $100 million of which bought ads on television networks. Roughly 13 percent of that $100 million went to Disney-owned entertainment networks. 

Strangely enough, Disney decided not to restrict advertising from HBO Max or Peacock, which are owned AT&T and Comcast, the two biggest cable service providers in the United States. Although, Disney added that the ban reflects “the comprehensive business relationships we have with many of these companies.” 

Disney may not need Netflix, but it will be interesting to see how Netflix adapts to new marketing strategies from here on out. At this point, it seems as if Disney is pivoting to control every aspect of the media space. The decision to restrict advertising from HBO Max or Peacock isn’t as significant because the streaming services are no where close to mirroring Netflix’s stature and dominance in the current market. Disney is picking off the big players one by one, and overtime, will probably have seized full control of the streaming industry as well.

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