Netflix shares tumble as Disney yanks movies, announces streaming service

Netflix shares tumble as Disney yanks movies, announces streaming service

CNBC reports that Disney will be pulling their content from Netflix, and they will be launching their own streaming service, set to premiere in 2019.

Netflix said in a statement that "U.S. Netflix members will have access to Disney films on the service through the end of 2019, including all new films that are shown theatrically through the end of 2018".

Additionally, the service will feature a collection of library content, including Disney and Pixar movies and Disney Channel, Disney Junior and Disney XD television programming. It was also mentioned that this video streaming service will provide the people with 10,000 sports events every year including contents from NHL, MLS, MLB, and collegiate sports events. According to Disney CEO Bob Iger, the company is still considering how it wants to bring Marvel and LucasFilm titles to consumers.

Disney's defection, announced on Tuesday alongside quarterly results showing continued pressure on sports network ESPN, is a calculated gamble that the company can generate more profit in the long run from its own subscription service rather than renting out its movies to services like Netflix. The company hasn't said anything about its television series. This is big news to both companies and will definitely put a dent into Netflix's subscriber base. Marvel and Disney partnered up a few years back and have been releasing movies such as Captain America: Civil War, Thor, The Avengers and shows such as Daredevil, Luke Cage, Iron Fist, and Jessica Jones onto Netflix. Starz Entertainment in 2011 pulled roughly 1,000 films in the Starz catalog on Netflix at the time. These announcements from Disney and CBS suggest that process is well underway.

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Evercore analyst Vijay Jayant views the Disney-branded service as potentially disruptive as a subscription video-on-demand platform.

While there aren't many details about Disney's direct-to-consumer service-including cost, what it will look like, or what will happen with Marvel and "Star Wars" content-some analysts are optimistic on the services potential, mainly because of its content.

This is not Disney's first attempt to go directly to the consumer.

"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. This release comes as part of Disney's competitive struggle to offer the most exclusive access to some of this generation's classics, with the Creatv Media's founder Peter Csathy claiming that although "Netflix has had a huge head start, Disney thinks it can win".

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