Disney is starting its own streaming service, pulling content from Netflix

Disney says its own streaming service will be much cheaper than Netflix

Disney to launch new streaming service
They say competition is good for consumers; if so, the future is only looking brighter for cord cutters. The Walt Disney Company in early August announced it plans to pull its movies from Netflix and launch its own (less expensive) streaming service, which will be available in the U.S. in 2019.

‘We’re going to launch big’

Despite early reports that Netflix was working toward a deal to keep some Disney properties on the streaming service permanently, we now know that, come 2019, all Star Wars and Marvel movies will live exclusively on Disney’s platform.

“We’re going to launch big, and we’re going to launch hot,” Disney CEO Bob Iger said in September at the Bank of America Merrill Lynch 2017 Media, Communications & Entertainment Conference in Los Angeles. The service will be home to several new Disney series, three or four exclusive Disney movies, as well as all the Disney content that’s currently hosted elsewhere.

Iger laid out plans for the future, saying the next two years would be focused largely upon direct-to-consumer streaming products, and upon the transition to a new CEO (Iger will be leaving in 2019).

A lower price point 

While it’s true that a Disney-specific streaming service won’t have quite as much content as competitors, Iger noted that the plan is to make up for this difference in the subscription cost. During a November earnings call, the executive said that the new streaming service would be priced “substantially below where Netflix is.” The CEO noted, “That is in part reflective of the fact that it will have substantially less volume. It’ll have a lot of high quality because of the brands and the franchises that will be on it that we’ve talked about. But it’ll simply launch with less volume, and the price will reflect that.”

Disney taking control

A streaming service is a logical step for Disney, which last year purchased a 33 percent share in BAMTech, MLB Advanced Media’s streaming technology company. BAMTech’s previous projects include HBO Now and Major League Baseball’s streaming service. Disney also announced it is now buying an additional 42 percent stake in BAMTech for $1.58 billion.

In an earlier statement, Iger said: “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.”

The new platform won’t just host Disney classics. The company plans to make a “significant investment in an annual slate of original movies, TV shows,” and more.

Netflix currently produces a family of shows based on Marvel properties —  Daredevil, Jessica Jones, Luke Cage, and Iron Fist — so it will be interesting to see how close the two companies remain.

Iger also announced that Disney will be launching a new, stand-alone ESPN streaming service in 2018. This is huge news for cord cutters who have left cable behind but still yearn to watch sports. It is also big for ESPN, which has had a rough couple of years. The sports media empire has lost 12 million subscribers since its peak in 2011, and the company fired a number of high-profile employees in 2017, including NBA reporters Marc Stein and Chad Ford. Former ESPN writer Bill Simmons claimed that the company was too slow to recognize the importance of digital infrastructure.

According to Disney’s statement, the new ESPN service will offer “approximately 10,000 live regional, national, and international games and events a year, including Major League Baseball, National Hockey League, Major League Soccer, Grand Slam tennis, and college sports. Individual sport packages will also be available for purchase, including MLB.TV, NHL.TV and MLS Live.” There is no confirmation yet on pricing. Disney says “the new service will be accessed through an enhanced version of the current ESPN app.”

This is not the only important cord-cutting news of late. FX recently announced it is partnering with Comcast to deliver FX+, a $6 per month, ad-free streaming service that includes all of the network’s original series. However, that service will be linked to cable subscriptions. If Disney’s new plans let viewers say goodbye to cable while keeping ESPN’s multiple sports packages, it could be a serious blow to cable companies and the status quo at large.

Update: Disney CEO Bob Iger says the new service will be significantly cheaper than Netflix. 

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