Disney to rival Netflix and Amazon with own streaming service

Jay Jacobs
August 12, 2017

But a new announcement out of the company's most recent earnings report asserts that a new streaming service will mean no more Disney on Netflix.

The exec also noted that the other option on the table was to add the Marvel and Star Wars films to the new Disney streaming service.

"While the stock may respond negatively in the near term, the potential value creation over the next 5 years is likely worth well above the implied ~$2-$3 billion in Disney's EV from the Netflix deal", Janedis said in a note to clients. But a dedicated TV streaming service will open up this content and much more to a wider, global audience. Additionally, the service will feature a vast collection of library content, including Disney and Pixar movies and Disney Channel, Disney Junior and Disney XD television programming. Yet, Disney has a tendency of remaining above water for the most part, so this decision to separate from Netflix must be warranted.

"This lays the groundwork for the company to do a number of things", Iger said, speaking in a post-earnings interview with CNBC. The company has not yet decided where it will distribute films from superhero studio Marvel and Star Wars producer Lucasfilm after 2018.

Disney said its new services would be based on technology provided by video-streaming firm BAMTech, and announced it would pay US$1.58 billion to buy an additional 42 percent stake in that company, which it took a minority stake in past year. The main point of my column-that weakness in Disney's cable brands like ESPN would continue-was proven correct, as sales from its media and networks division cam in at $1.84 billion, below expectations for $1.99 billion.

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Like many breakups, the one between Walt Disney (NYSE: DIS) and Netflix (NASDAQ: NFLX) might get a bit messy.

Most of the animated catalog will be gone from Netflix come 2019. These announcements from Disney and CBS suggest that process is well underway.

If Disney wanted to go the route of standalone streaming services for all its brands, it would have the content to do that.

"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", said Robert Iger, Disney chairman and chief executive.

"The more content that consumers can obtain without a multichannel video subscription, not to mention more and more content without advertising, the less interest they will have in subscribing to the big multichannel video bundle", he wrote.

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