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The “multi-year content licensing agreement” between Disney and Sony Pictures provides the former with tremendous potential and flexibility across its platforms. In addition, it allows Sony Pictures to maximize the value of each of its films.
The Walt Disney Company (NYSE: DIS) and Sony Pictures Entertainment have announced a significant licensing deal. Within the agreement, Disney receives US streaming and TV rights to the films Sony will release from 2022 to 2026. Besides, Disney also gets rights to Sony Pictures’ iconic library titles, ranging from the “Jumanji” and “Hotel Transylvania” franchises to its Marvel films, including Spider-Man.
Keith Le Goy, president of Worldwide Distribution and Networks at Sony Pictures Entertainment, stated:
“This groundbreaking agreement reconfirms the unique and enduring value of our movies to film lovers and the platforms and networks that serve them. We are thrilled to team up with Disney on delivering our titles to their viewers and subscribers. This agreement cements a key piece of our film distribution strategy, which is to maximize the value of each of our films, by making them available to consumers across all windows with a wide range of key partners.”
Disney and Sony Pictures Deal
According to the press release, the “multi-year content licensing agreement” between Disney and Sony Pictures provides the former with tremendous potential and flexibility across its platforms. In addition, it allows Sony Pictures to maximize the value of each of its films.
“This groundbreaking agreement reconfirms the unique and enduring value of our movies to film lovers and the platforms and networks that serve them,” Le Goy said.
Notably, the licensing agreement with Disney comes after Sony Pictures signed a deal with Netflix Inc (NASDAQ: NFLX). Both the agreement are similar, allowing the platforms to stream Sony Pictures’ content. However, the deals only cover the US, despite the worldwide geography of streamers.
The companies have not revealed the financial details of their agreements. But as some estimate, with Netflix and Disney deals combined, Sony may get about $3 billion in movie licensing while these agreements are valid.
Disney Stock’s Response to the Deal
Following the news, Disney stock moved higher to close 0.18% up at $183.11 on Wednesday. In the pre-market trade today, DIS shares are further up, trading at $183.60. Disney’s market cap totals $332.392 billion.
Disney stock is still recovering after the COVID-19 pandemic. After the coronavirus broke out, Disney suffered a loss of revenue and its employees faced job losses. Furthermore, it faced competition from Netflix during stay-at-home orders. However, its investors are optimistic about better returns, especially with the increased investment in quality streaming services. As we have reported in March, Disney+ has surpassed 100 million paid subscribers. Starting from April 30, Disney re-opens two California theme parks, which also inspires and makes investors bullish about Disney shares.