Next Salvo in the Streaming Battle: Disney’s ABC, FX, and National Geographic Won’t Run Netflix Ads

It has ongoing relationships with most of the other media giants that are diving into streaming, so there’s more reason to make nice. Treading Carefully

Disney earlier proposed banning ads from all streaming rivals—rather than just Netflix—but it ultimately chose a more targeted approach. The situation reflects the tangled web of the new streaming economy, with onetime partners turning into rivals. And Disney might consider airing a Netflix ad during its Oscars telecast, provided it promotes a movie and not the streaming service itself, said the person, who asked not to be named because the deliberations are private. The Burbank, Calif.-based company also bought majority control of Hulu with its acquisition of Fox’s entertainment assets earlier this year. In the early days of streaming, big media companies saw companies like Netflix and Hulu as critical outlets for reruns of their TV shows and films. The Journal was first to report on Disney barring Netflix ads. Disney started an online service last year called ESPN+, which offers college and some pro sports for $5 a month. is stepping up its fight with Netflix as the two companies prepare to compete for streaming customers, but it’s not a total war yet. (One exception is movies, which usually get promoted everywhere.) But tensions have grown now that everyone is racing to build a direct relationship with viewers. Robot’ creator Sam Esmail on the show’s fourth and final season—Will Adam Sandler finally get an Oscar nomination?—Meet the women leading Netflix into the streaming warsFollow Fortune on Flipboard to stay up-to-date on the latest news and analysis. Netflix was an early adopter of online advertising and still relies more on internet ads than traditional media. Walt Disney Co. Next month, it will introduce Disney+, a $7-a-month service featuring programming from Marvel, Pixar, and other family-friendly outlets. That’s now changed as Disney, AT&T’s WarnerMedia, Comcast, and others launch their own direct-to-consumer video offerings. Disney channels such as ABC, FX, and National Geographic will no longer air Netflix commercials, according to a person familiar with the matter, since the ads would help promote a rival service. Small Piece

Netflix has many other options to advertise its service, through billboards, online marketing, and other TV networks. TV networks have long used discretion in running ads from rival media companies. But Disney’s ESPN network will still run Netflix spots. Amazon, which has its own streaming service, remains a key partner with Disney in distributing its channels—through the Fire Stick device and in selling consumer products like Frozen 2 dolls. “While the initial decision was strictly advertising based, we reevaluated our strategy to reflect the comprehensive business relationships we have with many of these companies, as direct-to-consumer is one element.”

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—Nick Kroll on the ‘meta experience’ of making ‘Big Mouth’—How Comedy Central grew up to hold its own against Netflix—‘Mr. “The direct-to-consumer business has evolved, with many more entrants looking to advertise in traditional television, and across our portfolio of networks,” Disney said in a statement. An estimated 13% of that network-TV budget was with Disney-related channels, according to ISpot, but a person familiar with the matter said the actual figure was even smaller. The amount going to Disney was already fairly small. The streaming pioneer only spent about $99 million of its $1.8 billion marketing budget on network TV ads, according to the Wall Street Journal, which cited ad-measurement firm ISpot.TV.
Source: fortune

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