Disney to End Netflix Deal and Start Streaming Service

The Walt Disney Company yesterday announced plans to end its licensing deal with Netflix and launch its own streaming services.

The news was part of a larger announcement that the entertainment powerhouse will acquire majority ownership of BAMTech, LLC from MLBAM, the interactive media company of Major League Baseball, and launch an ESPN-branded multi-sport video streaming service in early 2018, followed by a Disney-branded direct-to-consumer streaming service in 2019. BAMTech is a global leader in direct-to-consumer streaming technology.

“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,” said Robert A. Iger, Disney chairman and CEO. “This acquisition and the launch of our direct-to-consumer services mark an entirely new growth strategy for the company, one that takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands.”

The ESPN-branded multi-sport service will offer a robust array of sports programming, featuring 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.

The new service will be accessed through an enhanced version of the current ESPN app. In addition to the multi-sport service, the ESPN app will include the news, highlights, and scores that fans enjoy today. Consumers who are pay TV subscribers will also be able to access the ESPN television networks in the same app on an authenticated basis. Disney is betting that the app will become the premier digital destination for many sports fans.

The new Disney-branded service will become the exclusive home in the U.S. 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 will also make a significant investment in an annual slate of original movies, TV shows, short-form content, and other Disney-branded exclusives for the service.

Additionally, the service will feature a vast collection of library content, including Disney and Pixar movies and Disney Channel, Disney Junior and Disney XD television programming.

With this strategic shift, Disney will end its distribution agreement with Netflix for subscription streaming of new releases, beginning with the 2019 calendar year theatrical slate.

Netflix will continue to carry TV series from Disney’s Marvel division as well as movies under an existing deal.

Plans are for the Disney and ESPN streaming services to be available for purchase directly from Disney and ESPN, in app stores, and from authorized distributors.

The BAMTech deal is subject to regulatory approval.