Disney will end its distribution deal with Netflix and
launch its own streaming service, the company recently announced. It
intends to launch the service in 2019.
The move is a real blow to Netflix, which secured a valuable streaming deal with Disney back in 2012 — before streaming had really taken off. The deal only kicked into effect last year, so Netflix is barely seeing any benefit here.
At the same time, it’s a natural step for Disney, which
has a huge library of valuable movies and shows to offer. Disney already
makes it hard to get a lot of its top movies — requiring people to
purchase, rather than rent, a film for instance — so it makes sense that
we’re seeing the company try to draw even bigger profits from
streaming.
Disney’s streaming service will be built off technology from BAMTech, the MLB-founded video streaming platform. Disney was already a major investor
in BAMTech, and today it’s making an even bigger investment — of $1.58
billion — giving it a 75 percent stake in the company. The acquisition
still requires regulatory approval.
“This acquisition and the launch of our
direct-to-consumer services mark an entirely new growth strategy for the
company, one that takes advantage of the incredible opportunity that
changing technology provides us to leverage the strength of our great
brands,” Disney CEO Bob Iger said in a statement accompanying the announcements.
The Disney-branded streaming service will be the
“exclusive home in the US for subscription-video-on-demand viewing,” and
will kick off with films including Toy Story 4 and the sequel to Frozen.
“Original movies, TV shows, [and] short-form content” will be added to
the service, and it’ll be filled out with older movies from Disney and
Pixar’s catalog and shows from Disney’s TV channels.
In addition to creating a streaming service for Disney movies and TV shows, the company will also launch a streaming service exclusively for ESPN,
targeted for a launch early next year. Disney is promising about
“10,000 live regional, national, and international games and events a
year,” with individual sports packages available as well. Disney plans
to sell both of its subscription services directly to consumers.