Disney to ditch Netflix in favor of its own video-streaming service

Evrard Martin
Août 11, 2017

This is part of their other major announcement which is that they are now the majority owner of BAMTech, LLC which will enable them to launch their own video streaming on demand services later on. On Tuesday, Disney announced that it is ending its partnership with the entertainment company found in 1997.

The new ESPN service will feature about 10,000 live games and events per year from Major League Baseball, the National Hockey League, Major League Soccer and others, Disney said.

The Magic Kingdom will launch a new streaming service in 2019 that will exclusively offer animated and live-action Disney and Pixar movies, starting with releases such as "Toy Story 4" and the sequel to "Frozen". Disney features such as "Rogue One: A Star Wars" often appear front and center for users when they first open up the app, alongside Netflix originals.

"Netflix is very well entrenched especially since they are worldwide". What's less clear is if Disney will be able to make big bucks from it, he said.

Netflix and Disney have been partners since 2012, when the companies struck a deal before streaming movies and TV shows over the internet had become an industry-changing phenomenon.

Disney might bring more of its properties - particularly its Marvel superheroes and the Star Wars franchise - under its wing, and could even offer them as separate streaming services.

Instead, they helped create a competitor that now threatens their primary business, pay-TV.

Media-research firm SNL Kagan estimates that the average cable subscriber will pay $8.37 a month for ESPN by 2018, the priciest channel bundled in most standard cable plans. That could be hugely attractive for families with young children in the U.S. It's unclear how quickly Disney will expand into global markets and until then Netflix will be able to focus on that subscriber growth, but this will certainly cut a big piece out of Netflix's pie and poses a formidable threat to the company's future earnings. Hulu is owned by Disney, Comcast, Fox and Time Warner. The company announced yesterday during its latest earnings report that it intends to move its movies from Netflix. It's not meant to compete with the company's TV channels. In March the company hired producer Scott Stuber to oversee that division.

Disney will have to be careful that it doesn't transfer too much sports programming from its TV channels to the app. Getting the balance wrong could upset cable companies and weigh on the price they pay Disney for ESPN, Weiser said.

"It would be very out of character for Disney to significantly reduce its commercial (and strategic) relationship with a party like Netflix, who Disney believes will continue to be a very important brand/service in the future of home video entertainment", Juenger wrote.

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