OnScreen Summit: Netflix-Disney Deal a 'Game Changer'

AXS TV's Cuban says smaller content providers may suffer

By Tim Baysinger -- Broadcasting & Cable, 12/6/2012 4:43:04 PM

The recent exclusive film deal that Netflix struck with Disney is a "game changer," according to Jeff Cuban, executive VP, AXS TV/Magnolia Pictures, echoing comments made by Netflix chief content officer Ted Sarandos during the UBS Media conference this week.

Cuban was speaking during the Programming Roundtable at B&C/Multichannel's OnScreen Summit here Thursday. The panel was moderated by Multichannel News' programming editor R. Thomas Umstead.

"Netflix doing this deal with Disney, very well may have the same impact on downstream content providers as retrans negotiations and increase sports rights fees are having on the cable industry," said Cuban. "They're spending a heck of a lot of money."

Cuban finished by noting that choices by Netflix will have to made, and if he wonders of some of their lesser-profile content partners will suffer. "Somebody is not going to get paid on the bottom end that was typically getting license fees from Netflix."

Michael Bishara, VP and GM of TV Everywhere at Synacor, looked at the Netflix-Disney deal in terms of the consumer, noting that he wondered whether the payout will force Netflix to raise its subscriber fees. "How long with the $8 [fee] hold?" he asked. With the deal being a big blow to Starz, who holds the rights for Disney's films through 2017, Bishara commented that the main takeaway from the deal is that "it's the realization that the premium window is pretty darn compelling."

Use of the On Demand platform has helped the film industry as well, especially with smaller, more independently-funded moves. That's a good thing according to Bill Livek, CEO and vice chairman, Rentrak, who said in his opening remarks that "the On Demand cycle is more healthy than ever before."

Cuban's film distribution company, Magnolia Pictures, distributes many films that aren't from the major studios. He said that On Demand is a great way to preview these films, noting that if it performs well, it helps the movie get shown in theatres. "That model works very well," he said.

Susan Cartsonis, executive producer and president for Storefront Pictures, says that On Demand model has paved way for films that wouldn't see the light of day. "I think it's great for movie producers because it allows movies that wouldn't get made otherwise to get made," said Cartsonis.