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The Empire Strikes Back: Disney Bans Netflix Ads on Its TV Networks

The Empire Strikes Back: Disney Bans Netflix Ads on Its TV Networks

With the launch of Disney+ less than a month away, The Walt Disney Company is grabbing onto any competitive edge it can find. 

“Disney Bans Netflix Ads as Streaming’s Marketing Wars Intensify,” the headline in The Wall Street Journal reads. And that’s exactly what this move boils down to. While it’s commonplace within the television industry to avoid advertising other networks altogether, it’s hard to ignore the fact that Disney will soon be competing with Netflix more directly through their respective streaming services.

Disney, Comcast and AT&T “are set to spend hundreds of millions of dollars on advertising over the next year to attract consumers to their new streaming-video services as they look to compete with industry juggernaut Netflix,” report Alexandra Bruell and Suzanne Vranica in the WSJ article. In contrast, Netflix spent $1.8 billion on advertising in 2018 and will soon be playing defense. 

Earlier this year, Disney had already issued an internal directive to its networks to ban advertising from all streaming services. It soon revisited this policy, allowing advertising from nearly every streaming platform except Netflix. The reevaluation is supposed to “reflect the comprehensive business relationships we have with many of these companies,” according to a Disney statement. 

The move is unsurprising, given Disney’s challenge of luring viewers away from Netflix to its new platform or to Hulu (which it owns a majority stake in). 

It makes even more sense with survey data from Piper Jaffray: the financial outfit found that nearly three-quarters of Netflix subscribers have no plans to subscribe to Disney+ (or Apple TV+, for that matter). Even the vast majority of those who do plan to subscribe to Disney+ will keep their Netflix subscription as well.

“It might be the Magic Kingdom, but don’t be fooled, those guys are hard-nosed businessmen,” Mike Vorhaus, owner of the consulting firm Vorhaus Advisors, told The Los Angeles Times. “Disney is serious about making its streaming service work.”

As the streaming wars start to reach a turning point, Disney has already been pulling content back from Netflix in preparation of the launch. Banning Netflix from spending any of its multi-billion dollar ad budget on Disney-owned networks is a natural next step.