Disney has decided to stop making its newly released movies available to stream on Netflix beginning in 2019 and wants to create its own internet service built around its Disney entertainment brands. It also will launch an ESPN video streaming service like live sports.
Disney had a good relationship with Netflix since many years, but decided to move towards its own platform, said CEO Bob Iger.
Disney said its streaming service will involve the newest live-action and animated movies from Disney and Pixar.Upcoming movies Toy Story 4, the sequel to Frozen and live-action version of The Lion King, won’t make it to Netflix. Marvel TV shows will remain.
Netflix isn’t losing all Disney contents. It will continue to bring TV series from Disney’s Marvel division and current movie deal has a while to continue.
“This is an announcement of independence by Disney, and now you have a direct competition between these two giant companies,” said Peter Csathy, founder of the advisory firm Creative Media. “Netflix has a large head start, but Disney thinks it can succeed and this represents a big turning point of the company.”
Shares of Disney have drop around 2.6 percent to $104.25 in extended trading after the declaration. Netflix, which is losing Disney content, lost 3.5 percent $172.15.
Disney is going to buy 42 percent of BamTech, the streaming arm of Major League Baseball, in which company is paying $1.58 billion and will launch ESPN service in early 2019.
But Disney’s new decision for its own streaming service definitely raises questions about how much Netflix will invest in the future projects.