Why Netflix could win the streaming war against Disney

Netflix has poached Disney's most successful showrunner in a move that could signal a shift in the balance of power.
Shonda Rhimes, creator of popular shows like Grey's Anatomy, Scandal and How To Get Away With Murder, has signed a contract with the streaming giant, leaving Disney-owned ABC after 12 years.

The announcement was made by Netflix's boss Ted Sarandos, who called Rhimes "a true Netflixer at heart".
He praised her as "one of the greatest storytellers in the history of television" and was "so excited to welcome her to Netflix".
He has reasons to be.

Not only is Rhimes' production company Shondaland a multi-Emmy award winner - and the only one to have ever taken up an entire night of ABC's prime time - but her hiring is seen as a statement of how Netflix plans to win the streaming battle.

It all started in January with rumours of a possible Disney/Netflix merger, with the studio giant taking over the biggest streaming provider in the world.

For reasons unknown, such a deal did not take effect.

Most likely, Netflix is so confident of its shopaholic-like growth strategy that it sees Disney not as an older, wiser, richer Goliath - but as a direct competitor.

The next move was Disney's, with CEO Bob Iger announcing last week he was pulling all his content from Netflix and starting its own streaming service.

In the worst possible scenario for Netflix, this will mean no more Marvel superheroes, no more Star Wars films, Indiana Jones or live-action remakes of Disney classics.

In a nutshell, the exact kind of content Netflix' flagship consumer base wants.

The media had a field day. There were reports claiming this would constitute a major blow to Netflix - on top of the company's £20bn in debt and obligations which shows no sign of reversing.

To the untrained eye, Netflix looked like a glorified David with fat chance of taking down a real giant. Not so fast.

Netflix's core strategy is to sign deals directly with showrunners it believes in. The likes of Orange Is The New Black's Jenji Kohan, Spike Lee, Aziz Ansari, Joe Swanberg - the list goes on and on.

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Following a strategy first implemented by cable networks like HBO and FX, it then gives these showrunners enough freedom to do virtually whatever they want. Without time commitments, money barriers or creative shackles.

This is how Netflix strives, by being free from the strains of advertising space or broadcast timetables.

Traditional networks like ABC will give a profitable showrunner like Rhimes a lot of creative freedom and may even entice them with seemingly unlimited funds, but will end up demanding too many episodes to fit their schedule with short running times to play between commercials.

And then there's the global reach. For Rhimes, Lee, Kohan, Ansari and all the other "Netflixers at heart", the opportunity to be streamed worldwide is increasingly important.

On the other hand, this is Disney we're talking about. It owns ABC, A&E, ESPN, the History channel and even 30% of streaming platform Hulu.

It also has its own streaming platform, DisneyLife, with its own shows and films. The question is: Who will pay for it?
The giant blockbusters will always premiere in cinemas first before landing on DisneyLife and, meanwhile, Disney is slowly losing its chance at nabbing the biggest names in TV.

Sarandos will take the blows inflicted on Netflix, and keep spending billions in original content - betting on quality showrunners he believes in.

Investors don't seem worried, and neither does the talent. After all, doesn't David win in the end?