Netflix on the Ropes? Disney’s Latest Move Could Deal Harmful Blow
(Disney)(August 14, 2017) Disney recently announced the acquisition of BAMTech – a global leader in direct-to-consumer streaming technology – and will roll out two new streaming services in the coming years. The first is an ESPN-branded multi-sport video service that’s pegged to launch in 2018. The second is a Disney-branded streaming platform that’s projected to go live the following year. The latter of these two could have major implications for Netflix and its viability heading into 2020.
The new ESPN service will host an estimated 10,000 events a year, ranging from MLB baseball and NHL hockey to Major League Soccer, tennis, and various college sports. Programming will be accessed by users using a new version of the current ESPN app. It will also offer individual sports packages, including MLB.TV, NHL.TV, and MLS Live, and sports news and highlights.
Disney’s new movie streaming service will bring an end to the company’s multiyear content agreement with Netflix, which is a potentially big blow to the streaming giant. That means Disney flicks – including Pixar releases – will no longer be carried by Netflix. Films such as Toy Story 4 and the sequel to Frozen, among others, will all be exclusive to Disney’s new service. Disney also says it will “make a significant investment in an annual slate of original movies, TV shows, short-form content and other Disney-branded exclusives” for the new service; Disney Channel, Disney Junior, and Disney XD programming will be included.
“This is an exciting validation of our team, its achievements and the customer-centric platform it’s built,” said Michael Paull, Chief Executive Officer of BAMTech. “Yet, we’ve merely scratched the surface of what can be accomplished in a future where we combine Disney and ESPN’s world-class IP and our proprietary direct-to-consumer ecosystem.”
Disney’s new deal kills any rumors that it might purchase Netflix outright, and leaves Netflix reeling from losing a source of content. Netflix, with a subscriber base of nearly 104 million, has spent years luring customers away from traditional cable subscriptions. Now it has added competition.
Netflix chief content officer, Ted Sarandos, recently told Reuters that the company is in “active discussions” to maintain the ability to show Disney’s Marvel and Star Wars films after 2019. Disney has yet to decide how it will distribute Marvel and Lucasfilm movies. Obviously, losing the license to host that kind of content would make Netflix less attractive to subscribers.
