Disney Challenges Big Tech's App Store Deals
Disney CEO Bob Iger recently threw down the gauntlet to tech giants like Apple and Google, demanding a sweeter deal for distributing Disney-owned streaming services. At an investor conference, Iger lamented the hefty sums being siphoned off by Big Tech app stores like Apple’s, which currently rake in a sizeable chunk of revenue from Disney’s streaming platforms like Hulu and Disney+. Unlike Netflix, which has its own distribution channels, Disney relies heavily on third-party app stores, a strategy that comes with both advantages and costs.
The terms of deals with platforms such as Apple and Roku can significantly impact Disney’s bottom line. Apple, for instance, charges a 15% fee on revenue generated from signups within its apps, while Roku may demand fees and a share of ad inventory from video companies. Despite these challenges, Netflix has managed to thrive independently, showcasing the potential benefits of owning one’s distribution channels. For Disney, renegotiating these deals could lead to improved profit margins and greater control over its content’s distribution.
The dominance of app stores in the tech industry cannot be overstated, with companies like Apple relying heavily on services like the App Store for revenue growth. Apple’s “Services” business segment, which includes the App Store, has become increasingly vital to its future success. However, pressure from regulators and vocal critics may force Apple to reconsider its revenue-sharing models with content providers like Disney. By leveraging its position as a major player in the streaming market, Disney could push for more favorable terms and potentially reduce the amount it pays to third-party distributors.
As the battle for a fairer deal unfolds, Disney’s potential strategies remain intriguing. While the company may not need to sever ties with third-party app stores entirely, the threat of such a move could give it leverage in negotiations. With Apple already facing scrutiny over its App Store policies, Disney could capitalize on the shifting regulatory landscape to secure a more favorable agreement. Ultimately, the outcome of these negotiations could have far-reaching implications for the future of streaming services and the tech industry as a whole.
In the midst of this high-stakes drama, the disclosure that Mathias Döpfner, CEO of Business Insider’s parent company, Axel Springer, sits on Netflix’s board adds an interesting twist to the narrative. Moreover, Axel Springer’s involvement in a multi-billion-dollar lawsuit against Google further underscores the complex web of relationships and power dynamics at play in the tech and media sectors. As Disney continues to navigate the evolving landscape of digital distribution, one thing remains clear: the battle for control over streaming services is far from over.
