Disney Add-ons Netflix Ads as Ripping Marketing Wars

21

Walt

Disney Co

Advertising is prohibited from. T

Netflix Inc.

across their entertainment television networks, according to people who are familiar with the case, a sign that the marketing wars over video streaming are growing as media giants engage with each other for signatories.

Disney,

Comcast Corp.

and

AT & T Inc.

There will be hundreds of millions of dollars on advertising over the next year to attract consumers to their new video streaming services as they strive to compete with Netflix's juggernaut industry. Last year Netflix spent $ 1.8 billion on advertising and will play defense against new Hollywood entrants.

Disney, which includes ABC and Freeform, edited staff who would not accept advertisements from any competitive streaming services, but a course that was later reversed and which had reached a compromise with almost all companies, the people who had contributed. They pointed out the case. Netflix was the exception.

In deciding, Disney considered whether he had a mutual business or advertising relationship with the companies, one of whom said. Netflix does not display ads in its programs.

In a statement, Disney said that the signature-video streaming business has emerged, “with many other entrants trying to advertise in traditional television, and across our network portfolio.” The company said it had reassessed its ban The introduction of streaming advertisements “reflects our comprehensive business relationship with some of these companies. ”

Netflix refused to comment.

Marketing Blitz

Netflix's expenditure on advertising rose by 66% in 2018, most of which went to television.

Netflix global advertising expenditure

Estimated expenditure Netflix AD

Disney is pushing deeper into streaming and is promoting its tensions with technological giants in many ways. The company is in conflict with each other

Amazon.com Inc.

over the financial terms of his apps in streaming media-media TV Amazon, causing no TV TV deal implemented by Disney +, a streaming service to come Disney +, reported Wall Street Journal Thursday.

Meanwhile, Disney CEO

Robert Iger

it went off the table of Apple Inc. in September on the same day Apple announced its own streaming service.

Disney's change on Netflix announcements represents a significant change. In the television industry, it is not unusual for television networks to refuse advertisements from direct competitors, particularly if they include the specific time and date when the tournament is in place. However, broadcasters were generally allowed to advertise streaming services such as Netflix and Amazon Prime Video, even when it was clear that they were attracting viewers away.

Now the landscape is changing. As traditional media companies conduct their own streaming services, they will go hand in hand with the technology entrepreneurs – and with each other – as ever before.

Disney, AT&T and Comcast plan to enter the video-streaming video, which has a recognized armouring and film brands. But can they hold their own juggernaut Netflix in the industry? Photograph showing: Heather Seidel / The Wall Street Journal

Disney, whose monthly Disney + service sent $ 6.99 per month launched in November, decided that she was not interested in playing Netflix ads longer. Netflix spent $ 99.2 million on U. television advertisements during 2018, with approximately 13% going to Disney-owned entertainment networks, according to the company's iSpot.TV estimate.

Disney will offer programs from franchises such as Star Wars and Marvel, the full catalog of “The Simpsons” and a range of classic films, among other fees.

Apple'S

TV +, to be launched in November, offers a number of shows featuring the best stars and producers. Peacock and AT&T, Comcast's, streaming services that are not expected yet will be launched next year – original packaging and library programs from those companies.

The animated ‘The Simpsons' will be streaming on Disney + ..

Photo:

Unnamed / Associated Press

The companies have committed a number of billion dollars in developing new content for their new streaming outlets, discussing major talent deals and receiving classic TV shows such as “The Big Bang Theory” and “The Office.”

They also intend to liberalize advertising. NBCUniversal Comcast is aiming to spend approximately $ 100 million on advertisements outside its own properties to launch Peacock, which is expected to start in April, according to people who are familiar with the company's plans. . The number could be increased, some of the people said.

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It is expected that NBCUniversal will spend twice this amount on its own property, including a large amount of promotions for Peacock on its coverage of the 2020 Olympics, which people said. The NBCU refused to comment.

WarnerMedia AT&T is planning to spend about $ 300 million on advertising during the next year to push HBO Max, according to people who are unfamiliar with the company. HBO refused to comment.

A brand new average build can be expensive. Hulu, who owns Disney most of now, is heavily spending on promotion. He set aside $ 574 million in 2010 among great pressure, and even when a company spent a ripe last year $ 161.2 million, according to an estimate from the Kantar firm's admissions firm.

Although Disney prohibition only applies to Netflix, some in the industry are considering restrictions that could affect other players in streaming, including the new entrants. ESPN Disney will continue to accept Netflix ads.

Television executives discussed the setting of guidelines to limit the extent to which new streaming services generally can advertise on their routes, people with knowledge of them. One of the ideas is to limit the amount of money received during the summer to use high sales ad to promote streaming services. Another tactic that is being discussed is premium prices streaming companies that cut time ad, they said.

Netflix has increased its advertising spending significantly over the last few years as it has expanded, adding new subscribers and shows at a quick clip. The company now has around 60 million international participants and 91.5 million international subscribers.

Netflix warned investors about the impact their business might have on the media channels if they don't accept their ads. “Reducing the available marketing channels may have a negative impact on our ability to attract new members,” said the company in its annual report section on risk factors.

In August, Disney's position on public streaming was when ABC Entertainment President

Karey Burke

He said at a television industry conference that the network would not allow streaming ads, according to a report in Adweek. Finally, Disney decided to stand after deciding that he had a mutually beneficial relationship, including advertising opportunities, with many streaming companies, such as Apple, Amazon and Quibi.

Disney had an extensive agreement to license programs for Netflix for years, but is drawing back shows and movies for its Disney + streaming service.

Write Alexandra Bruell at alexandra.bruell@wsj.com and Suzanne Vranica at suzanne.vranica@wsj.com

Corrections & amplified
Last year Netflix spent $ 1.8 billion on advertising. The units were incorrectly labeled in millions on an earlier version of the chart with this article.

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