What can we learn from the Netflix-Disney negotiation strategy?

1 The Netflix-Disney deal

In 2012, Netflix and Disney signed a landmark agreement that gave Netflix exclusive rights to stream Disney's movies and shows in the US. The deal was worth an estimated $300 million per year for Disney and gave Netflix a competitive edge over other streaming platforms. The deal also included Marvel, Pixar, and Lucasfilm, which meant that Netflix had access to some of the most popular franchises in the world, such as Star Wars, Avengers, and Toy Story.

2 The negotiation process

The negotiation process between Netflix and Disney was complex and lengthy, involving multiple rounds of discussions, proposals, and counteroffers. According to Ted Sarandos, Netflix's chief content officer, the negotiation was based on a mutual understanding of each other's goals and values. Netflix wanted to offer its subscribers a diverse and high-quality content library, while Disney wanted to reach a wider and younger audience and monetize its content assets. Both parties also recognized the changing landscape of the entertainment industry and the need to adapt to the digital era.

3 The negotiation challenges

The negotiation was not without challenges, however. One of the main obstacles was the existing contracts that Disney had with other distributors, such as Starz and HBO. These contracts limited the availability and windowing of Disney's content for Netflix, which meant that Netflix had to wait for a certain period of time before it could stream some of the Disney titles. Another challenge was the uncertainty and risk involved in the deal, as both parties were betting on the future growth and success of their respective businesses.

4 The negotiation outcomes

The negotiation resulted in a win-win outcome for both Netflix and Disney, as they both achieved their objectives and benefited from the deal. Netflix gained a loyal and engaged customer base, increased its revenue and market share, and enhanced its brand reputation and value. Disney also increased its revenue and exposure, expanded its global reach and influence, and leveraged its content portfolio and intellectual property. The deal also paved the way for future collaborations and partnerships between the two companies, such as the production of original Marvel and Star Wars series for Netflix.

5 The negotiation lessons

The Netflix-Disney deal offers several valuable lessons for negotiators, regardless of the industry or context. To craft a compelling and realistic proposal, it is important to do your homework and research both parties' interests, needs, and constraints. Additionally, it is essential to build trust and rapport with your counterpart, based on honesty, transparency, and empathy. Negotiators should also be flexible and creative, open to different options and alternatives, and willing to experiment and innovate. Lastly, it is important to think long-term and negotiate with a strategic and visionary mindset, aiming for a sustainable and mutually beneficial agreement.