Netflix and Amazon on edge as Disney plans own streaming service
Studio will pull all titles from rivals and try to corner market in family-friendly fare from 2019
Disney is to pull its movies from Netflix and take on the streaming company with the launch of its own service from 2019, showing family-friendly fare such as the Toy Story films, Frozen and its forthcoming sequel, and The Lion King. The move is being seen as a potential major challenge to Netflix, whose shares fell 4% in after-hours trading on the back of the news, and to Amazon.
Disney said it had not yet made a decision on whether to include Marvel, home to the Avengers franchise and characters such as Iron Man and Captain America, and Lucasfilm, the company behind Indiana Jones and Star Wars, in the new service. The company has been identified as a potential buyer of Netflix, with which it has an exclusive film distribution deal in the US, with a market value of about $75bn.
Disney is launching its service in the US, but chief executive Bob Iger told analysts to think of it as a global service. The company is also launching a streaming service for ESPN, the sports network with rights to top flight-competitions including Major League Baseball and the NFL.
The launch of our direct-to-consumer services marks an entirely new strategy for the company, said Iger, one that takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands.
The service will initially be family-focused, drawing on Pixar and Disney fare and including productions from the Disney Channel and Disney Junior.
Disney said it would become the exclusive home in the US for subscription video-on-demand viewing of the newest live action and animated movies from Disney and Pixar beginning with the 2019 theatrical slate. The media landscape is increasingly defined by direct relationships between content creators and consumers, said Iger.
In 2015, Disney began experimenting with its own streaming service in the UK, Disney Life, priced at 9.99 a month and specialising in kids and family content from Bambi and The Jungle Book to Pixars Toy Story franchise, as well as more modern blockbusters such as the Pirates of the Caribbean series.
Disney gained the capability to launch the new streaming service thanks to its purchase of a majority stake in BAMTech, a subsidiary of MLBAM, the internet arm of Major League Baseball. Disney already owned a stake, but is paying $1.58bn for an additional 42%.
Earlier this week, Netflix moved to reduce its reliance on licensing intellectual property from rivals by acquiring comic book company Millarworld. It hopes that the company whose properties Kick-Ass and Kingsman have already been turned into films that have been shown on the network will do for it what the acquisition of Marvel has done for Disney.
By owning its own franchises, Netflix is hoping to reduce its rapidly growing content budget. It has already committed to spending $16bn on the production and licensing of films and TV shows over the next five years.