is banning advertising from
across its entertainment TV networks, according to people familiar with the situation, a sign that the marketing wars over streaming-video are escalating as media giants battle each other for subscribers.
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. Netflix spent $1.8 billion on advertising last year and will be playing defense against Hollywood’s new entrants.
Disney, whose properties include ABC and the Disney Channel, earlier this year put out an edict to staffers that it wouldn’t accept ads from any rival streaming services, but later reversed course and found a compromise with nearly every company, the people familiar with the situation said. The exception was Netflix.
In making its decision, Disney evaluated whether it had a mutual business or advertising relationship with the companies, one of the people said. Netflix doesn’t show ads in its programs.
In a statement, Disney said the subscription streaming-video business has evolved, “with many more entrants looking to advertise in traditional television, and across our portfolio of networks.” The company said it re-evaluated its initial blanket ban on streaming ads “to reflect the comprehensive business relationships we have with many of these companies.”
Netflix declined to comment.
Netflix’s spending on advertising rose 66% in 2018, with much of that going to television.
Netflix’s global advertising spending
Estimated U.S. Netflix ad spending
Disney’s push deeper into streaming is bringing to the fore its tensions with tech giants on multiple fronts. The company is separately at odds with
over the financial terms for its apps in Amazon’s Fire TV streaming-media player, one reason that Disney’s forthcoming streaming service Disney+ has no Fire TV deal in place, The Wall Street Journal reported Thursday.
Meanwhile, Disney Chief Executive
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resigned from Apple Inc.’s board in September on the same day Apple announced its own competing streaming service.
Disney’s ban of Netflix ads marks a significant shift. In the TV industry, it isn’t unusual for TV networks to reject ads from direct rivals, especially if they include the specific time and date when a competing program will air. But broadcasters have generally allowed streaming services such as Netflix and Amazon Prime Video to advertise, even when it became clear they were luring away viewers.
Now, the landscape is changing. As traditional media companies launch their own streaming services, they will be going head-to-head with the tech giants—and with each other—as never before.
Disney, whose $6.99-per-month Disney+ service launches in November, decided it wasn’t interested in playing home to Netflix ads any longer. Netflix spent $99.2 million on U.S. TV ads during 2018, with some 13% going to Disney-owned entertainment networks, according to estimates from ad-measurement firm iSpot.TV.
Disney’s service will offer programming from franchises such as Star Wars and Marvel, the full catalog of “The Simpsons” and a range of classic movies, among other fare.
TV+, also poised for a November launch, will offer a handful of shows featuring top stars and producers. Comcast’s Peacock and AT&T’s HBO Max—as yet-unpriced streaming services expected to launch next year—will package original and library programming from across those companies.