Disney+ Running Starz Banner Ad in Exchange for Streaming Rights to its Own Movies

Disney CEO Bob Iger says he has no regrets licensing pay-TV rights to original movies for big dollars to Netflix and Starz.

Then came Disney+ and the rush to over-the-top video distribution.

Disney’s massive push to bridge the SVOD divide with Netflix (and Amazon Prime Video) through a branded SVOD service stocked with original movies and TV shows ran into legal challenges since many Disney movies were earmarked for competing distribution channels through pre-existing license agreements.

Thus, getting the company’s singular corporate initiative in 2019 to launch on time reportedly required some creative legal maneuvers behind the scenes.

Disney+ and ESPN+ will run banner ads for the Lionsgate owned Starz pay-TV and standalone SVOD service in exchange for exclusive streaming rights to Star Wars: The Force Awakens, among other titles.

Harrison Ford in ‘Star Wars: The Force Awakens’

The $6.99 Disney+ service had been touted as ad-free. And indeed, there will be no Starz advertising within Disney+ and ESPN+ platforms.

First reported by The Verge and confirmed by Disney, the banner ad will limited to the log-in page and is part of a revised license agreement enabling Disney+ to have access to original movies previously slated for Starz.

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“I think as you can see from what we’re making available, and from seeing some of the titles that we’re making available at launch, there’s been a lot of effort that went into bringing it all back together so that we could make it available on the service,” Michael Paull, head of Disney streaming services, told The Verge in August.

“It’s clear that, from a library perspective, while there’s certainly a lot of volume, the recent studio slate will not fully be available at any one time because of the existing deals and it would take time for those rights, ultimately, to revert back to us,” Iger said last summer.

Agnus Chu, head of content at Disney+, contends license agreements can sometimes be split up “100 different ways.”

“Where it’s been licensed to, who it’s licensed to, and for how long, that gets very complicated,” he said.

Disney Re-Names BAMTech ‘Disney Streaming Services,’ Outlines Direct-to-Consumer Strategy

Disney April 11 announced it has renamed its BAMTech backend technical company “Disney Streaming Services” as part of the 96-year-old media giant’s expansion into direct-to-consumer business.

Acquired for $2.5 billion in 2017 from Major League Baseball Advanced Media, BAMTech has powered numerous OTT services, including HBO Now, MLB.tv, PGA Tour Live, ESPN+, and NHL.tv, among others.

“This is an exciting day for the entire Disney family. It is also a challenging time,” CEO Bob Iger told attendees at the start of a three-hour investor day presentation in Los Angeles.

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The executive reiterated that Disney is entering the DTC ecosystem from a “position of strength, confidence and unbridled optimism.”

Iger said Disney is banking its future in part on digital distribution, including a new corporate segment — Direct-to-Consumer & International — featuring the pending Disney+ SVOD service, ESPN+, Hulu, Hulu with Live TV and Asia’s Hotstar ad-supported VOD platform with 300 million actively monthly users.

Kevin Mayer, chairman of DTC & International, said Disney’s foray into digital is based in part of a projected 1.1 billion high-speed Internet households worldwide by 2020 compared to 700 million in 2015.

Mayer said there will be 810 million DTC paid subscribers globally by the end of 2020 — growing 30% annually. With 1.2 billion hours of video streamed daily projected by 2020 compared to 260 million hours in 2015 — up 50% annually over a 10-year period.

[DTC] is becoming a crowded marketplace, in which brands matter more than ever,” Mayer said. “We have the brands that matter most when it comes to great entertainment.”

Mayer said Disney three domestic DTC products — Disney+, ESPN+ and Hulu — would target different market segments as standalone services and “likely be bundled to create even more value to consumers.”

Disney is eyeing a Latin America launch for ESPN+ as well.

Launching in November, Disney+ will feature catalog, current and original content from Disney, Marvel, Pixar, Lucasfilm and National Geographic — the latter due to Disney’s $71.3 billion acquisition of 20th Century Fox.

Mayer said Hulu, which Disney assumed majority ownership stake following the Fox acquisition, represents Disney’s most-established DTC product.

“We’re actively evaluating international rollout strategies for [Hulu],” he said.

Disney said Hulu was the fast-growing domestic SVOD service in 2018, ending the year with 25 million subscribers since launching in 2008. Online TV service — Hulu with Live TV — launched in 2018. Viewing increased by 75%.

“Hulu is going to give consumers the right product at the right price,” said Hulu CEO Randy Freer.

Russell Wolff Upped to GM of Streaming Platform ESPN+

Longtime ESPN executive Russell Wolff has been named EVP and GM of ESPN+, the branded over-the-top video streaming service, it was announced Oct. 31 by Michael Paull, president, Disney Streaming Services, to whom Wolff will report.

In his new role Wolff will be responsible for managing ESPN+, which recently topped 1 million subscribers, in addition to collaborating on the overall management and commercialization of ESPN-branded digital products.

“His strong business acumen and exceptional leadership qualities make him the perfect leader to advance the growth of ESPN+ as we continue to evolve the service,” said Paull, a former senior executive at Amazon Prime Video.

Most recently, Wolff served as EVP and managing director, ESPN International, where he was responsible for all of ESPN’s international businesses, which grew to reach multiple countries and territories across all seven continents.

As part of his previous role, Wolff guided ESPN’s digital expansion around the world, including the launch of mobile, online and streaming platforms, helping it establish a position as the number one digital sports brand globally. He led ESPN’s digital media teams to grow their global digital media portfolio, which included more than a dozen localized editions of ESPN.com and the ESPN app, ESPNFC (global football vertical), ESPNCricinfo (global cricket vertical), ESPN’s streaming platforms (including WatchESPN) and multiple other digital initiatives.

He also was a key driver of ESPN’s continued growth and leadership in Latin America. Under his direction, ESPN’s offerings grew into a multimedia business that includes 13 television networks, the most diverse portfolio of programming and sports events, and the operation of production facilities and offices in Argentina, Brazil, Colombia and Mexico.

Wolff first joined ESPN International in 1997 as vice president, managing the company’s business interests in the Pacific Rim.  In 1998, he joined ESPN Star Sports, as VP of programming and event management and was later promoted to SVP.  Wolff returned to ESPN in 2000 as SVP, overseeing programming, marketing, and the company’s businesses in Asia, Europe, the Middle East, and Africa.

After graduating from Dartmouth College, Wolff began his career at the Leo Burnett Company in Chicago.  Shortly afterwards, he returned to Dartmouth and received his M.B.A. from the Amos Tuck School of Business Administration.  He will continue to lead ESPN’s involvement with the Special Olympics.