Disney said its new services would be based on technology provided by video-streaming firm BAMTech, and announced it would pay $1.58 billion to buy an additional 42% stake in that company, which it took a minority stake in past year.
The service has about a fourth of the subscribers as Netflix, but is backed by NBCUniversal, FOX, Disney, and Turner.
The first is an ESPN-branded service which, the company says, will offer 10,000 live sporting events a year, including MLB, NHL, MLS games and more. Disney levied a $1.58 billion bid to acquire majority ownership of the company, a deal CEO Robert A. Iger described as a "very, very significant strategic shift" during an earnings call on Tuesday.
With this shift, Disney will end its distribution agreement with Netflix for subscription streaming of new releases, starting with the 2019 calendar year theatrical slate.
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Disney stock fell 3.8% in after-hours trade. The new streaming services are a way to connect directly with consumers and take advantage of new viewing habits. However, one area that hasn't been true in has been with Disney properties. "Major League Baseball will continue to work with Disney and ESPN to further grow BAMTech as it breaks new ground in technologies for consumers to access entertainment and sports programming".
The new Disney-branded service will become the exclusive home in the USA for subscription-video-on-demand viewing of the newest live action and animated movies from Disney and Pixar, beginning with the 2019 theatrical slate, which includes Toy Story 4, the sequel to Frozen, and The Lion King from Disney live-action, along with other highly anticipated movies.
As for Disney, this new service will become the home for Disney content for the U.S. and will offer subscription-based on-demand viewing of all of the company's latest movies from Disney and Pixar. Star Wars and Marvel movies in the future could be on the Disney service exclusively, could not be there at all or could be there as well as on other services.
Disney's holdings include Marvel, Lucasfilm, Pixar, Disney Channel and Disney XD, though Marvel TV shows such as "Jessica Jones" and "Daredevil" will remain on Netflix, the Los Angeles Times reported Netflix should also be getting the next two "Star Wars" movies - "The Last Jedi" and 2018's untitled Han Solo movie - at least through the end of next year. Profit, though, came in at $1.58 per share, three cents more than projected.
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