Disney drops Netflix, plans to launch its own streaming empire

9 Aug 2017

Sign at Disneyland, California. Image: Ken Wolter/Shutterstock

Disney decides to ‘let it go’ and say goodbye to Netflix in North America, while Europe is understood to be unaffected by the move.

Entertainment powerhouse The Walt Disney Company is to end its film distribution deal with Netflix in the US.

During its recent earnings report, Disney revealed that it will pull all of its movies from Netflix there, as it aims to launch a branded direct-to-consumer streaming service in 2019.

‘The media landscape is increasingly defined by direct relationships between content creators and consumers’

The move will be a severe blow to Netflix, which has had a relationship with Disney since 2012. However, the decision only applies in North America and does not affect content in Ireland or the rest of Europe.

“The statement Disney made only impacts the US and only the pay one output deal for theatrical films,” a spokesperson for Netflix told Siliconrepublic.com.

“US Netflix members will have access to Disney films on the service through the end of 2019, including all new films that are shown theatrically through the end of 2018. We continue to do business with The Walt Disney Company on many fronts, including our ongoing relationship with Marvel TV.”

Disney won’t drop Netflix in the US immediately, but plans are to cut ties with movies released in 2019, with remaining content being removed at the end of that year.

Christine McCarthy, senior executive vice-president and CFO at The Walt Disney Company, said: “Our ability to successfully execute on our core strategy, coupled with our plans for new direct-to-consumer offerings, give us continued confidence in our ability to drive shareholder value.”

Sporting ambitions

Disney said it will launch an ESPN video streaming service in 2018, which will include MLB, NHL and MLS content.

It announced last night (8 August) that it has also acquired an additional 42pc stake – worth $1.58bn – in BAMTech, the company that powers the streaming for MLB, HBO, NHL, and WWE, to name a few. This gives Disney a 75pc share in the company and will value BAMTech at $3.75bn.

“Today we announced a strategic shift in the way we distribute our content,” said Robert Iger, CEO of The Walt Disney Company.

“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.

“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,” Iger said.

Sign at Disneyland, California. Image: Ken Wolter/ Shutterstock

Updated, 4.11pm, 9 August 2017: This article was updated to include comments from Netflix and clarify that the statement made by Disney only affects the US.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years