11 August, 2017
Disney said the new services would be based on technology provided by video-streaming firm BAMTech, in which the media company is increasing its stake to 75 percent by paying $1.58 billion.
Following the announcement, Netflix's shares fell by more than 5% in after-hours trading. Guess we'll have to see how it pans out. 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.
Given our incomparable collection of strong brands that are recognized and respected the world over, no one is better positioned to lead the industry into this dynamic new era, and we're accelerating our strategy to be at the forefront of this transformation. The company is now paying out over $1.5 billion to own 75% of Bamtech - the video distribution company created by Major League Baseball that is working on building both streaming services. The company hasn't said anything about its television series.
Because of these plans, some sources were claiming that Disney intends to own a bigger piece of the streaming services.
For years, Netflix has looked like an unstoppable streaming force. The service aims to offer Disney's family films and ESPN sports programming directly to viewers.
Though the cost of the move will hurt the company's profit in the near term, the strength of the company's content may help it succeed in the long run, some analysts said. Consumers, who are pay-TV subscribers, will also be able to access the ESPN television networks in the same app on an authenticated basis. The move could accelerate the trend toward "cord cutting" in which consumers drop extensive cable TV bundles in favor of streaming services such as Netflix. Starz Entertainment in 2011 pulled roughly 1,000 films in the Starz catalog on Netflix at the time.
Iger also said Tuesday that Disney was still weighing how to make its Marvel and Star Wars feature films available to streaming services in the coming years - and whether Marvel and Star Wars might each get its own proprietary service. During its earnings report today, the House of Mouse announced it will remove its films from Netflix in 2019 and launch its own streaming service later that same year.
Its Amazon Channels service has pre-empted the carving up of content, offering a place where you can stream dedicated channels from the likes of HBOGo, MGM, cult United Kingdom distributor Arrow Video and the Discovery Channel. He included that not only movies but also the shows will come under this category.