Economy

Disney Taking Majority Control of BAMTech, Plans New Streaming Services

Disney Taking Majority Control of BAMTech, Plans New Streaming Services”

A broader Disney-branded offering should launch in 2019, just as its distribution deal with Netflix (NASDAQ: NFLX) expires.

Shares of Walt Disney Co (DIS) are down about 5.5% to $101 in Wednesday's early morning trading session, after the company beat on earnings per share and missed on revenue expectations, as sales slipped 0.3% year over year.

The new Disney-branded service will become the exclusive home in the USA for subscription-video-on-demand viewing of the newest live action and animated movies from Disney and Pixar, beginning with the 2019 theatrical slate, which includes Toy Story 4, the sequel to Frozen, and The Lion King from Disney live-action, along with other highly anticipated movies. Disney CEO Bob Iger tells CNBC that the company had a "good relationship" with Netflix, but chose to move its content - including Star Wars titles and popular Pixar films, off of the platform.

Disney, which also owns the ABC television network, said its consumer channel would include its Disney and Pixar movies and content from the Disney Channel, Disney Junior and Disney XD.

Disney chief executive Bob Iger says the launch marks "an entirely new strategy" for the company, which "takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands".

Disney's bombshell Tuesday announcement to yank its movies from Netflix in 2019 is a shot across the bow, and Hollywood is paying close attention to the giant subscription company's counter attack.

Millar Comics includes the likes of Kick-Ass and Kingsman: Secret Service, which have all been made into major motion pictures.

However, it's not yet clear how Disney's other major franchises - including Marvel films and the Star Wars franchise - will be impacted, and whether it will launch internationally.

A Netflix rep said the news doesn't affect the deal it has with Disney for the Marvel TV shows such as Luke Cage, Daredevil, and The Defenders.

With this shift, Disney will end its distribution agreement with Netflix for subscription streaming of new releases, starting with the 2019 calendar year theatrical slate. But it's worth noting these 2016 releases are among their freshest offerings, which gives the impression that after the theaters, viewers might be able to depend on seeing the films pop up on Netflix.

In order for the company to make these services happen, The Verge claimed that Disney will take a majority ownership of BAMTech for an amount of $1.58 billion. They were responsible for most of the newer Netflix titles at the time, and it was like having the rug pulled out from underneath your feet. Another possibility is that Disney content will be distributed across both Netflix and the animation company's proprietary streaming platform, though this option is unlikely.

There aren't a lot of details pertaining to the Disney streaming service at the moment.



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