Disney to Introduce Streaming Services Over Next Two Years

In a significant departure from its traditional business model, Disney announced it plans to pull its movies from Netflix and roll out two of its own online streaming services. Early next year the company will introduce an ESPN streaming service that is expected to cover 10,000 events each year, including MLB, NHL and MLS content. The company also plans to launch a Disney-branded streaming platform in 2019 that will offer its movies and TV programming as well as original content exclusive to the service. Following the news, Netflix stock dropped 7 percent in after-hours trading.

“Disney has dominated the film industry in recent years, thanks to acquisitions that have placed the ‘Star Wars’ franchise, Pixar Animation and Marvel Studios under one roof,” notes The Wall Street Journal. The company’s move “signals rising confidence at media companies that they can take control of distributing their content online, without relying on Netflix or others as much as they now do.”

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CBS, for example, reported strong results for direct-to-consumer services for its broadcast network and premium cable channel Showtime. This week the company announced plans to expand internationally and develop a streaming sports service.

Disney, CBS and other media companies are looking to take back control of their own content as an alternative to the licensing deals that have become a standard industry practice.

“The new Disney-branded service is to carry movies Disney releases starting in 2019,” reports WSJ, “including ‘Toy Story 4′ and ‘Frozen 2,’ the company said Tuesday.” Disney chief Bob Iger told analysts the service would first launch in the U.S. before expanding globally. He also suggested older Disney titles could be added to the service.

“The disposition of the Marvel and Lucas or ‘Star Wars’ films we have not determined yet,” added Iger, as reported by Recode. “It’s possible we’ll continue to license them to a pay service like Netflix, but it’s premature to say exactly what we will do … There’s been talk about launching a proprietary Marvel service and ‘Star Wars’ service, but we’re mindful of the volume of product that would go into those services, and we want to be careful about that.”

The new ESPN streaming service, to be managed by ESPN president John Skipper, “will not be a streaming version of the regular ESPN cable-network channel,” according to WSJ. “Flagship programs such as ‘Monday Night Football’ and NBA basketball won’t be on the ESPN streaming platform.”

Last year, Disney invested $1 billion for a 33 percent minority stake in MLB Advanced Media spin-out BAMTech, “the company that powers streaming for MLB, HBO, NHL [and] WWE,” explains TechCrunch. Yesterday, “Disney announced it would acquire an additional 42 percent stake in the streaming infrastructure provider for $1.58 billion.” BAMTech will power the new Disney and ESPN streaming services.