Disney going it alone with planned streaming services

Walt Disney Co. will end its partnership with Netflix Inc. and launch two of its own separate streaming services in the next two years. Beginning in 2018, the company will launch an ESPN-branded multi-sport video streaming service and will follow that up with a Disney-branded direct-to-consumer (DTC) streaming service in 2019, it announced in a Tuesday press release to coincide with its third-quarter earnings report. Netflix spokesman Jonathan Friedland said in an email that the end of its Netflix agreement will only impact certain U.S. deals, so Netflix in Canada will be spared any loss of Disney content. Disney will also spend $1.58 billion to purchase from Major League Baseball’s MLB Advanced Media an additional 42-per-cent stake in streaming technology company BamTech, giving it a majority ownership. “The media landscape is increasingly defined by direct relationships between content creators and consumers, and our control of BAMTech’s full array of innovative technology will give us the power to forge those connections, along with the flexibility to quickly adapt to shifts in the market,” Robert Iger, chairman and CEO of Disney, said in the release. Canaccord Genuity analyst Aravinda Galappatthige said in a Wednesday note that the investment in BamTech signalled that Disney was already “angling toward” a DTC strategy “for a while now.” As part of the move to host its own content, Disney will also end its distribution agreement with Netflix for new releases beginning in 2019. Galappatthige said this could mean platforms from Netflix and Amazon.com Inc. will rely increasingly on independent studios like DHX Media Ltd. and Lions Gate Entertainment Corp., which is likely to lead to large licensing deals. Accessed through an enhanced app, the ESPN service will have approximately 10,000 live regional, national and international games and events a year. Individual sports packages, including from the MLB, National Hockey League and Major League Soccer, will also be available. The Disney service will have exclusive movies from Disney and Pixar, including Toy Story 4, the sequel to Frozen, and new live-action The Lion King, it said in the release, adding it will invest in new content. Disney’s strategic shift comes after CBS Corp. said Monday that it will expand its own DTC streaming service into Canada, its first venture outside of the United States. Taken cumulatively these developments, including increased competition for the over-the-top (OTT) market, could lead to further deterioration in TV subs, Galappatthige said.

Disney going it alone with planned streaming services

Brief | August 9, 2017

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Disney going it alone with planned streaming services

Brief | August 9, 2017

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