Disney-Sony Movie Rights Deal Points to Future of Film Licensing

On the surface, Disney and Sony Pictures Entertainment seem to be two studios heading in opposite directions when it comes to business strategy.

Disney is investing huge sums of money and resources into building direct-to-consumer streaming platforms. Sony Pictures has vowed to stay on its traditional studio path, dealing high-end content to the highest bidders. But the two companies found common ground in a massive U.S. movie licensing deal that was more than a year in the making for Sony.

News of the agreement cheered Marvel fans, as it promises to make Sony’s Marvel titles — including various “Spider-Man” movies — available alongside Disney’s Marvel vault on the Disney Plus platform. For industry insiders, the real news is how Disney and Sony rearranged the traditional post-theatrical map for movies on their path to profitability through a maze of TV exhibition windows.

The deal that Disney struck starting with Sony’s 2022 theatrical slate was the completion of a larger strategy that included a separate movie pact that Sony unveiled last month with Netflix for the so-called Pay 1 window, or the first TV airing of a movie after its theatrical run and home entertainment release. In the past, the Pay 1 rights holder could impose limits on the timing and availability of movies even as they traveled to other licensees in later windows carefully delineated over a six-year span.

The Sony-Disney pact calls for Disney to buy up most of the post-Pay 1 windows. Because Sony brings such volume and a wide range of genres, the studio had clout in its negotiations. Netflix desperately needs strong movies for its service, and so does Disney to feed its many hungry linear and streaming platforms.

“That was our thesis — that the singularity of our corporate situation and the excellence of our content and the unconstrained way in which we could partner with the right people could be very attractive,” says Keith Le Goy, Sony Pictures’ president of worldwide distribution and networks.

Sony wasn’t sure if Disney would be a contender in the sale process that began in early 2020 with a roadshow presented by Le Goy. For Disney, Sony’s willingness to break with tradition and give Disney plenty of options for running movies across Disney Plus, Hulu, FX, ABC, ESPN, Freeform, National Geographic and Disney Channels was crucial, says Chuck Saftler, head of business operations for ABC, Freeform, FX Networks and acquisitions for Disney Media and Entertainment Distribution.

“This deal was negotiated with as much flexibility for what might come in the future as any deal I’ve ever been a part of,” Saftler says.

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