Netflix is a business that gets the best of both worlds. On the one hand, they license movies and shows from a range of studios and production companies, which can be accessed by paying customers. But they are now also a studio, producing a range of content directly for their viewers; recent big hits for the company include House of Cards and Orange is the New Black.


This is less of a problem for the firm’s streaming competitors, because they have taken this on board and have a similar business model. November 20th, for example, saw both Netflix and Amazon’s Prime Movie service launching widely hyped shows. However, it would appear that traditional studios only now coming to grips with the problem – or indeed, are only now realising for the first time that they actually have a problem at all.


You can see the logic that led to studios like Disney embracing Netflix. In an environment where video piracy was rampant, licensing movies to a streaming service and getting paid for it (and not the measly royalties offered by music streaming services, either) must have seemed like a dream come true. But as such streaming services have developed into studios themselves, the question then becomes ‘why am I hiring out my movies to a competitors’ streaming service when I could have my own streaming service and cut out the middleman?’


The most interesting example of a studio which appears to be getting to grips with this issue is Disney; the studio recently announced that it will be launching a rival streaming service to Netflix in the UK, called Disney Life.


However, if Disney is finally coming to this conclusion, has it done so too late? Netflix and Disney signed a deal a while ago which allows Netflix to offer Disney movies (including blockbuster titles from Pixar, Lucasfilm and Marvel). However, a second part of that deal comes into effect in 2016; it allows the streaming company to show movies eight months after their cinematic release (normally streaming services can only offer such films significantly later). If Disney were on the verge of signing that deal today, would it follow through or would it walk away?


Just a couple of months ago, Netflix and movie distributor Epix (which is jointly owned by MGM, Paramount and Lionsgate) reached the end of a five year deal and failed to sign a new one, meaning that Netflix will no longer be able to offer a selection of films which had previously been available to its customers (such as the Hunger Games series). Netflix stock suffered temporarily – as it did a couple of years ago when it ended a similar deal with Starz – but soon recovered. Even if movie studios are wising up to the fact that they don’t need Netflix quite as much as they thought, Netflix’s offering is still sufficiently varied to bring new customers to the table – and its embrace of the new strategy of creating its own unique content means that as long as it keeps churning out hit shows, it could potentially still be in a strong position even if further studios attempt to limit its access to their own content.