Disney to launch streaming service by 2019 when Netflix contract ends

Disney will launch two streaming platforms one focused on sports and another in animated content come 2019. Image TheUSBPort

Disney will launch two streaming platforms one focused on sports and another in animated content come 2019. Image TheUSBPort

Probably not another subscription to yet another streaming service, but that is what Disney fans will have to get following the news the business is pulling all of its content from Netflix and launching its own offering. Because when you're the Fort Knox of popular content, with decades of golden properties and the market muscle to protect your fiscal interests, not owning your own streaming services would have seemed atypically passive for the Mouse House under chief executive Bob Iger. It was a nice fantasy, but it completely ignored one critical fact: Neither cable companies nor entertainment titans were going to swap billions of dollars in revenue from cable subscriptions for pennies on the dollar from streaming services.

The Disney service will be the only place where USA viewers can watch new live action and animated movies from Disney and Pixar, including "Toy Story 4", the "Frozen" sequel and "The Lion King" live-action movie. The service has about a fourth of the subscribers as Netflix, but is backed by NBCUniversal, FOX, Disney, and Turner. Netflix's current Marvel TV shows, however, will stay put. That deal has spawned Daredevil, Jessica Jones, Luke Cage, Iron Fist, and the upcoming The Defenders as well as The Punisher.

As you might imagine, most of us streaming service users are not amused.

While Disney will stop licensing movies to Netflix, (just as "Rogue One: A Star Wars Story" premiered on Netflix - the first of the Star Wars franchise to do so), the companies will not be severing all ties.

Disney may not be ending its deal to produce shows for Netflix, but the long-term future of the relationship seems a bit shaky. Disney will draw on its own content from its film and television catalog for its consumer channel, and offer a sports service which could fill a gap by delivering live sporting events. Consumers, who are pay-TV subscribers, will also be able to access the ESPN television networks in the same app on an authenticated basis.

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Still, it seems like Disney doesn't believe it will need to add these titles to generate demand for its Disney/Pixar streaming service.

This means by 2019, Netflix will have a sizeable Mouse-shaped hole to fill and you can be sure that this is only the start.

Disney said it 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. The big issue that could impact Netflix is whether it someday loses its partnership with Marvel TV.

Hours after Disney announced it would be splitting from Netflix, shares for the streaming service dropped by more than 4 percent.

Once again, Walt Disney Co.is shaking up the media industry. The Motley Fool has a disclosure policy. That's right - they think these 10 stocks are even better buys.

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