The Walt Disney Company, about a month away from debuting its premiere streaming television service Disney+, will no longer run advertisements for Netflix on any of its television entertainment properties, The Wall Street Journal reported on Friday.
The decision from Disney not to allow advertisements for Netflix marks a wrinkle for both established and upstart streaming television services trying to woo new subscribers to their services. Linear television networks have long run ads for streaming services, and Netflix has been a reliable big spender for TV spots, even as linear ratings have continued to decline as consumers shift their attention to Netflix and other OTT viewing. Nearly every major streaming service ran ads during last month’s Emmys broadcast, for example, with Disney+ landing the first position in the night’s first ad break.
As traditional media companies get into the streaming space, though, the calculus to accept ads from now-direct competitors could change. Disney, which owns the television properties ABC and the Disney Channel, had initially planned to prevent all rival streaming services from running ads on its properties before it reversed course for every company—save Netflix—according to WSJ.
Netflix declined to comment on the report.
In a statement, Disney told Adweek, “The direct-to-consumer business has evolved, with many more entrants looking to advertise in traditional television, and across our portfolio of networks. While the initial decision was strictly advertising based, we reevaluated our strategy to reflect the comprehensive business relationships we have with many of these companies, as direct-to-consumer is one element.”
While Disney isn’t currently running Netflix ads on its entertainment properties like ABC, Freeform and FX, it will continue accepting them on ESPN and its other related sports networks.
ABC Entertainment president Karey Burke had referenced her company’s new strategy in August, telling reporters at the Television Critics Association’s summer press tour, “competing streamers want to advertise on our air; we just won’t let them.”
Disney, whose Disney+ service will debut on Nov. 12 at $6.99 a month, has been aggressively courting new customers for its service with a bundle option and a steeply discounted three-year membership. In a call with investors earlier this year, Disney CEO Bob Iger said that the company was treating the launch of Disney+ as “the most important product” the company has launched during his tenure at the company.
The service will have a slate of original programming based on Disney’s deep bench of IP from the Star Wars and Marvel cinematic universes, the company previously announced.
Disney isn’t the only traditional media company breaking into the streaming space. The broadcast giant NBCUniversal recently unveiled plans for Peacock, and WarnerMedia is readying the premiere of its streaming service HBOMax for next spring. Discovery is also working on developing a streaming service for next year, although many of the details haven’t yet been announced. As of now, those companies are continuing to accept advertising from Netflix and other soon-to-be-streaming-rivals on their respective networks.