Disney to Pull Movies From Netflix, Will Launch Own Streaming Service
Disney is planning to cut out the middleman by pulling its movies from Netflix and launching its own streaming service. Starting 2019, the company will stop providing the streaming platform with new movies and enter the video streaming market themselves.
The announcement was made on Tuesday following the release of the company's quarterly results, which showed continued pressure on sports network ESPN. The world's largest media is counting on making more profit by launching its own streaming service rather than renting out its movies to a third party.
The move is a calculated gamble on Disney's part due to the cost of technology and the competition that will come from an already crowded market. The move is already being felt by both companies with Disney's stock falling 3.8 percent in after-hours trade while Netflix's fell by three.
The new streaming service is expected to launch next year and will be similar to ESPN's. Disney CEO Bob Iger said that the service will give the company "much greater control over our own destiny in a rapidly changing market."
Disney's new venture will be based on the technology provided by BAMTech. The company has already announced that it will buy another 42 percent stake in the video-streaming firm for $1.58 billion; this is in addition to the minority stake it purchased last year.
With the removal of their movies from Netflix, Disney will keep upcoming films such as "Toy Story 4" and "Frozen 2" for its own service. The company has yet to announce whether the pull out will also apply to films from its subsidiaries Marvel and Lucasfilm.
Netflix has pointed out that this does not end their partnership with Disney. The companies will continue to do business globally with the streaming platform retaining exclusive shows from Marvel Television.
