Several Disney+ movies unexpectedly disappear – Business Insider – Business Insider

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Last week several popular Disney movies disappeared from its streaming service, including “Dr. Doolittle” and titles from the “Home Alone” and “Pirates of the Caribbean” franchises, Polygon reports.

The departures reportedly caught users off guard, as streaming rivals like Netflix and HBO notify subscribers ahead of time when titles will leave the service, and Disney made no such announcement. That might be because the departures caught Disney by surprise too: The Verge confirmed with the entertainment giant that the titles were removed because the company ran into issues with pre-existing licensing deals. Disney expects the titles to return to its platform once existing deals expire. 

Disney’s licensing issues are a relic of its pre-Disney+ approach to the streaming world, wherein it acted as a content supplier to platforms that are now its rivals. Disney’s former strategy was a common one among legacy media companies: License out content to streaming services like Netflix and Hulu to complement the traditional linear TV business.

The approach could yield massive paydays for the owners of popular titles — Netflix paid $100 million to license WarnerMedia’s “Friends” for just one year, for instance. But as cord-cutting has raged on and threatened the viability of a linear TV-based business model, traditional media companies including Disney, WarnerMedia, and NBCU have built or are building out their own streaming services. And in this paradigm, content exclusivity is critical to outcompete rival services for subscribers: More than one-third (36%) of US adults ages 18-65 say they’ve signed up for a streaming service just to watch a show only that service had access to, whether original or not, per PwC.

As a result, Disney and other legacy media companies are willing to pay handsomely to regain an exclusive hold on their IP: In February 2019, Disney CFO Christine McCarthy projected that the media giant’s planned pullback would cost the company $150 million in 2019. That said, The Information pegged the actual opportunity cost of foregone licensing fees at $2.5 billion in incremental profit in 2019 alone.

Disney+’s licensing hiccup isn’t a major problem, but it does highlight the growing pains legacy media companies will face as they reorient around streaming. Any major business model change has its own obstacles, and legacy media companies going direct-to-consumer are learning that in real-time. In fact, Disney+ faced another notable hiccup as soon as it launched in November 2019: Due to technical issues, a significant number of subscribers were unable to connect to the service upon launch.

And as far as being hamstrung by existing licensing deals, Disney is not alone. For example, WarnerMedia’s forthcoming HBO Max service will face complications expanding internationally because a good amount of HBO content is already licensed in markets like Spain and the Nordics. While these issues will look different for everyone, each legacy media-owned service can only work within the boundaries established by its previous decisions. For Disney’s part, it should aim to be more mindful of those boundaries and give subscribers transparency into what titles are leaving the platform when. 

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