Disney+ launch in France underscores international streaming challenges

Disney may have amassed a gargantuan catalogue of content for its new streaming service, but its legacy business model is creating obstacles as it rolls the service out to more international markets.

Disney+ launched in the U.S. last November with more than 7,000 TV episodes and 500 movie titles. Having acquired such brands as Pixar, Marvel, Fox Studios, and Star Wars, Disney has solidly become the world’s box office champion over the past decade.

At a price of $6.99 per month, the service attracted 28.6 million subscribers in just four months — impressive, considering that in addition to the U.S., Disney+ is only available in Canada, the Netherlands, and New Zealand.

Now comes the hard part. The company is beginning a wider international expansion, which includes France, where I live. The service will launch in France on March 24 as a standalone streaming platform and also as part of a package with French premium TV service OCS.

But following the announcement, there’s been a fair bit of discussion about what subscribers won’t get as part of Disney+. France maintains a strict rule that movies released in cinemas must wait 36 months before they can appear on subscription streaming platforms.

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This means blockbusters like The Last Jedi and The Rise of Skywalker won’t be available. Viewers will have to wait until 2022 for the latter. Likewise, Disney’s Frozen 2, Pixar’s Toy Story 4, Avengers: Endgame, and recent release The Lion King are a couple of years away.

The company must also untangle international rights to earlier films. The first Iron Man movie and the 2008 Incredible Hulk, for instance, were produced before Disney acquired Marvel. Their rights in France were sold to a TV station, so they won’t be available either on Disney+.

While these rules are particular to France, each country has its own tangled thicket of regulation regarding digital media. When it comes to competing with Netflix in international markets, these legacy business models and established rights contracts create substantial hurdles.

And these rights issues for legacy media businesses aren’t limited to international markets. Warner Media seems to have made a miscalculation by selling the digital rights to the Harry Potter movies to NBC Universal several years ago. As such, the Harry Potter movies will be on the NBC Universal streaming platform Peacock when it launches later this year and not get to Warner’s HBO Max until at least 2025.

Eventually, most of these rights issues will get sorted out. Netflix faced a similar problem in France when it launched in 2014. The company had sold the rights to House of Cards to another French premium TV service, Canal+, and eventually bought them back. Still, Netflix’s initial international rollout was slow as it expanded by just a handful of territories at a time, and it often offered wildly different catalogues in each.

Netflix solved this for the most part, or at least minimized it, by making more original content. That’s a tougher problem for Disney, whose business model still relies on massive theatrical releases. Disney+ created a lot of buzz around its Star Wars Mandalorian series, but it has otherwise has been slow to introduce much original content to the platform.

Of course, none of that is fatal for Disney+. Many surveys have demonstrated that people tend to subscribe to multiple streaming services, and I’ll certainly sign up for Disney+ later this month. But it does mean Netflix will enjoy a comfortable advantage outside the U.S. for some time to come.

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