#Disney “Looking Selectively” at Licensing Content to Third Parties Outside of Netflix

Disney is exploring licensing some of its content to third parties outside of Netflix. 

“We’re already doing some licensing with Netflix, and we’re looking selectively at other possibilities. I don’t want to declare that it’s a direction we’ll go more aggressively or not. But we certainly are taking a look at it and being expansive in our thinking about it,” Disney CEO Bob Iger said on the company’s earnings call Tuesday. 

In the past, Iger had eschewed the thought of licensing to third parties, and specifically to Netflix, saying in a January 2022 interview with The New York Times that it would be like “selling nuclear weapons technology to a Third World country, and now they’re using it against us.” 

However, in November 2023, Iger said that while the company won’t “chase bucks,” it was already licensing some content to Netflix and would continue to do so. At the time Iger said he would not expect to license Disney’s “core brands.” 

On Tuesday, Iger said while he does not expect Disney to do a “significant amount” of licensing, they are looking at it with an “open mind.” 

“We had previously thought that exclusivity, meaning our own product and our own platforms, had huge value. It definitely does have some value. But we’re also watching as some studios have licensed content to third party streamers, and that then creates more traction, more awareness. And the fact increases not only the value of the content from a financial perspective, but just in terms of traction. So we’re looking at it with an open mind, but I don’t think you should expect that we’ll do a significant amount of it,” Iger said. 

This comes as Disney nears profitability in its streaming business. The company reported that its combined direct-to-consumer businesses of Disney+, Hulu and ESPN+ lost only $18 million last quarter, on revenues of $6.2 billion. And, when ESPN+ is removed from that equation, the entertainment streaming business was profitable, with revenues of $5.6 billion and a net profit of $47 million. The entire streaming division is expected to be fully in the black in the fiscal fourth quarter. 

The streaming profits will also likely be helped by a continued password crackdown, which is set to begin next month, “in very select markets,” ahead of a broader rollout in September. 

“We feel quite bullish about it. Obviously, we’re heartened by the results that Netflix has delivered in their password sharing initiative and believe that will be one of the contributors to growth, as [CFO Hugh Johnston] noted going forward,” Iger said.