Media companies selling the rights of their properties to other media companies is a common occurrence. And with the digital age leading so many media companies in a direction they did not expect, it can lead to some seller’s remorse.
An obvious example is Marvel Studios, who regretted their moves to sell the Spider-Man rights to Sony and the Hulk rights to Universal. They managed to get some leverage with those rights, but it came at a cost.
Now Walt Disney Co is in a similar position with the television rights to their Star Wars movies.
Turner, Disney and Star Wars
Turner Broadcasting has the rights to the Star Wars movies until 2024. The company is able to show these movies on its television channels, such as TNT and TBS, until 2024. They can also show the movies on their online platforms.
But now that Disney is launching its own streaming service, they want those rights back. It makes sense, as being able to sell the Star Wars movies as being on a new streaming service would get many people to subscribe.
Buying Back Rights is Not Easy
When a media companies sells the rights to an entity, they can have a very hard time getting those rights back. For instance, Marvel spent many years trying to get Spider-Man back from Sony. They did eventually, but it came with many stipulations. Most of the money from Spider-Man standalone movies still goes to Sony.
Disney are meeting similar resistance from Turner. These rights were sold in 2016, which means it is a very recent transaction. Turner have just started showing those movies on their channels. They paid $275 million for those rights to the six Star Wars movies that came out from 1977 to 2005, along with the newer movies.
If Disney is to get back those rights, they may have to pay a similar fee back to Turner. Even that may not be enough.
Entertainment Companies Going It Alone on Streaming
The rights issue is exacerbated by the attitude of many media companies to online streaming platforms.
Companies such as FOX and Disney were happy to sell the rights to their television shows and movies to streaming companies a few years ago. They were getting good money from those deals, while the streaming companies got to attract new users.
Now it appears that every media company is thinking about launching its own streaming service. It is what Disney is planning in the coming year. And it results in complications, because many rights deals still have a few years left to run.
The result may be incomplete streaming services, which are missing key catalogue elements until those rights deals are concluded.
Will Consumers Benefit?
The question many are asking is whether a fracturing of the streaming market helps consumers. On the one hand, it means that more titles are available to stream outside of the cable environment. But it also means many more streaming services to spend money on each month.
The situation between Disney and Turner shows that media companies can develop seller’s remorse on rights they sold, even if the deals were only done two years ago.