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Disney Unveils Streaming TV Services

Posted by Katie Sales on Aug 13, 2017 11:07:10 AM

Disney CEO Sees a Future Without Netflix, Comcast or DirecTV

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Disney’s plans include a new online ESPN service next year that would broadcast more than 10,000 live sporting events, including major league baseball, hockey, soccer and tennis for what Iger called a “reasonable” monthly fee. In 2019, the company will launch a Disney video service, featuring live-action films, Disney Channel TV shows and Pixar movies.

In the process, the Burbank, California-based company said it’s ending a deal to offer its newest films online through Netflix, the video-streaming pioneer. That will stop in 2019. Consumers, Iger said, are moving rapidly online and Disney needs to move with them.

Shares of Disney fell 5.5 percent to $101.07 as of 9:31 a.m. in New York. Netflix, which is losing a key supplier, was down 4.5 percent to $170.40.

At Disney, "we see a measure of EPS pressure as the investments ramp up," he wrote in a note Wednesday. "We see this as negative for Netflix: More options for the consumer have to limit Netflix’s pricing leverage and constrain its market opportunity as some consumers might be happy with Disney for online entertainment, instead of Netflix."

Iger, 66, has shown a willingness make big bets in the past. To revive the company’s flagging film business, he spent $15.2 billion over almost a decade buying a trove of movie ideas: Pixar Animation, Marvel Entertainment’s cast of comic superheroes and Lucasfilm’s “Star Wars” franchise.

Netflix has lost content before, including pictures from Sony, Paramount, MGM and Lions Gate. Yet its subscribers have continued to grow and the company has successfully expanded its streaming service worldwide.

“U.S. 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,” Los Gatos, California-based Netflix said in a statement. “We continue to do business with the Walt Disney Company on many fronts, including our ongoing relationship with Marvel TV.”

“Disney has great content that crosses generations,” said Trip Miller, a shareholder at Gullane Capital Partners in Memphis. “There is no doubt my grandchildren will consume Disney content that we consumed as children. They are just going to be consuming it a different way.”

Disney’s new services have the potential to attract viewers that trust the company’s brand, Neil Begley, an analyst at Moody’s Investors Service, said in a note. Still, the company may see more volatility as it will be easier for viewers to subscribe and unsubscribe, compared with pay-TV bundles, he said.

Iger knows his plans and remarks will likely anger big distributors such as Comcast Corp.’s Brian Roberts and Randall Stephenson of AT&T Inc., which owns DirecTV. He acknowledged that on Bloomberg TV Tuesday.

“My guess is distributors will look at this probably more as a threat than anything else,” Iger said. “It’s not intended to be that. We are reacting to the marketplace.”

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Topics: Netflix, Broadband, comcast, cutting the cord, Digital, directv, Disney, ESPN, Internet, sports, Streaming Tv, Uncategorized, WhyFly Wilmington

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