Streaming giant Netflix got a little less giant with Disney’s announcement that starting in 2019 they’ll launch their own streaming service, using the BAMtech technology that currently powers MLB.com. WWE’s streaming service and more. For now the deal only includes new Disney branded films such as Frozen 2, the live action Lion King and Toy Story 4.

“This acquisition and the launch of our direct-to-consumer services mark an entirely new growth strategy for the company, one that takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands,” Disney CEO Bob Iger said in a statement. The company announced the plans as part of reporting fiscal Q3 earnings, which included a 3% revenue decline in its cable networks group.

 The media conglomerate said it will launch an ESPN-branded multi-sport video streaming service in early 2018, followed by a new Disney-branded direct-to-consumer streaming service in 2019. Those will be powered by BAMTech, in which Disney will hold a 75% stake. The current plan is for Disney and ESPN streaming services to be available for purchase directly from Disney and ESPN; in app stores; and from authorized pay-TV partners.
It’s not clear whether Marvel and Lucasfilm properties will be included in the new service, but perhaps this explains why Netflix was eager to acquire its own in-house comic book brand with the Millarworld purchase earlier this week. Netflix currently houses Marvel’s “Marvel Knights” dark universe shows including Daredevil, Luke Cage, Jessica Jones, Iron Fist and The Defenders.
Disney will create a bunch of new content for the service, as well, offering yet more opportunities for the red hot streaming content industry.
The Beat’s own take: Disney would be dopes not to put all its content under one streaming roof, so if we don’t see Marvel and Star Wars on the new service, I’d be shocked.
Disney has often been seen as lagging in the online content field, despite launching its GO! division at the dawn of the internet era back in the day.
Brady Dale has some observations on the move, comparing it to Marvel going it alone with Heroes World in the 90s.

In 1994, Marvel decided to make a move very similar to the one that Disney is making now. It acquired a small comics distributor called Heroes World and distributed its comics exclusively through that one company. Marvel was the biggest publisher in comics at the time. This small distributor couldn’t handle the volume, according to Chuck Rozanski, one of the biggest comics retailers in the country. As a distributor, the company lowered the wholesale discount to retailers and forced them to cover part or all of their shipping costs. Even worse: it couldn’t get the orders right.

While I’m all for learning the lessons of Heroes World – a debacle that set the stage for the modern era of comics distribution – but streaming content has a bit more leverage than direct sales distro.

Still, the move set Netflix shares tumbling.

At The Verge, Bryan Bishop has more analysis as it relates to Millarworld:

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That amounts to Netflix getting into the publishing business, turning it from a streaming service that creates related content into a full-fledged entertainment company that operates across multiple mediums. It’s still early in Netflix’s evolution, and the company certainly hasn’t risen to power in the same way other movie studios and production companies have. But if you squint, the long-term strategy is clear: this isn’t just about creating movies and shows to compete against those from studios like Disney or Sony. This is about becoming a new Disney outright, with the diversified portfolio of properties that comes with it.

In essence, we’re seeing a repeat of the cable diversification as HBO, Showtime and Cinemax launched and then competed for movies and eventually their own original programming.  And as more and more people become wirecutters with overpriced cable packages, adding up all the streaming services you’ll need become less and less of a bargain.

Still, more opportunities for content creators down the line.

5 COMMENTS

  1. Cable cutters are going to love this news. Two more services to buy into if they want to watch some of the better content. But really, how niche are we going to get? After watching your favorite Disney movie a few times, what is going to be the long term draw to paying several $$ a month for a Disney stream? I’m guessing somewhere in the $10-15 per month range because Disney can command that kind of price. It’s getting to be that jumping between streaming services is way more complicated than pressing channel up or down on your cable remote.

  2. I think adult fans often forget that Disney makes content first and foremost for children. Kids watch the same 3 movies or shows over and over and over again. The stuff they put on Netflix is only a fraction of what they have in the catalog. If they put entire seasons of their content from XD, Junior and Disney channels on there, its a pretty sweet family friendly streaming service. Priced competitively with Netflix and using more robust filters/categories for their content that Netflix can etc its a homerun, must-have for families.

  3. This writing on the wall has been there since “House of Cards.” Netflix has been dealing with this attrition of content for years now. That’s why they keep spending more and more money every year creating their own programming. They know that that is the future. They can’t rely on the huge Hollywood studios to keep supplying them with content.

    Losing Disney was inevitable, and they knew it and planned for it. Look at all the children’s programming their funding these days, too.

  4. I think there was some problems when Walt first put the Wonderful World of Disney on tv. He even had to rent out Peter Pan, Hook and Tinkerbelle to the peanut butter company to get commercials.
    For myself I think there is only so many individual streaming services I can subscribe to at once, all those five or ten dollars charges add up. My cable system does carry Disney XD and other so Lego Star Wars Freemaker Adentures isn’t threatened. Yet.

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