Disney to launch streaming services for films, live sports
Entertainment giant seeks to bypass cable services and Netflix by streaming sports and movies itself, including Toy Story 4 and a sequel to Frozen
With new streaming services in the works, Disney is trying to set itself up for a future that’s largely been framed by Netflix: providing content you want to watch, when you want to watch it.
The Magic Kingdom is launching its own streaming service for its central Disney and Pixar brands and another for live sports. That would allow it to bypass the cable companies it relies on – and Netflix – to charge consumers directly for access to its popular movies and sporting events.
“They’re bringing the future forward. What they talked about were things that looked inevitable, at some point,” says Pivotal Research Group analyst Brian Weiser. But it’s less clear if Disney will be able to make big bucks from it, he adds.
This is important as the decline in cable households and the shift to smaller, cheaper bundles pressures the profitability of Disney’s cable networks. Fewer subscribers and fewer viewers mean less money. In the nine months until the start of July, cable networks’ operating income fell 13 per cent from the year before, to US$4.12 billion.
Starting in 2019, the only subscription streaming service with new animated and live-action Disney and Pixar films will be Disney’s own app. That will include Toy Story 4 and the sequel to the huge hit Frozen.
Older movies will be there too, as well as shows from the television channels Disney Channel, Disney Junior and Disney XD, and original programming and films. That could be hugely attractive for families with young children.
Disney is ending an exclusive earlier film deal with Netflix, and the streaming giant’s shares tumbled in after-hours trading. Netflix today has grown into an entertainment juggernaut in its own right, however, as it focuses more on its own exclusive programming.
Netflix already seemed to be bracing for the potential loss of the Disney movie rights when it announced its first-ever acquisition – the purchase of Millarworld, a comic book publishing company that will develop films and children’s shows based on its portfolio of characters.
Disney might bring more of its properties – particularly its Marvel superheroes and the Star Wars franchise – under its wing, and could even offer them as separate streaming services.
Chief executive Robert Iger says Disney is considering whether it should continue licensing Marvel and Star Wars movies to outside services like Netflix, move them into the Disney app or develop individual services for them.
The Disney service will be available in “multiple markets” around the world, taking advantage of Disney’s global name recognition.
Disney had already said it would be launching a streaming ESPN service. It’s not meant to compete with the company’s TV channels.
The sports service is coming in early 2018, a little later than previously announced, and will show baseball, hockey and soccer matches, tennis and college sports through ESPN’s popular mobile app. Notably, ESPN will not be streaming professional American football or basketball, at least initially.
Customers will also be able to buy fuller streaming packages from the baseball, hockey and soccer leagues, and watch them on the ESPN app.