Nextflix's Stocks Sink By 4% As Disney Pulls Out Its Movies

Disney Buys Majority Share of BAMTech, Will Launch New Streaming Services

Disney's subscription-video service will be the new and exclusive home of its iconic animations and live-action films. The timing of my call was bad: Disney's shares rallied 7.6% to $115.84 before starting to fall again. Sure, they might be slightly older children than those who want to tune in to watch the new Frozen sequel or the latest in the Toy Story franchise, but there's definitely going to be overlap among the potential customer base for a Disney streaming service, and one for either Marvel or Star Wars.

Users will be able to stream Disney and Pixar movies, Disney channel, Disney Junior and Disney XD content, as well as original movies and television shows.

Less than a year ago, Disney forged a movie streaming partnership with Netflix.

ESPN has faced the decline of TV subscribers in recent years and as a result, it was very much on the cards that it will have its own stand alone product but disclosure of a distribution agreement with its old associate Netflix has been hard on the investors.

The streaming services will give Disney "much greater control over our own destiny in a rapidly changing market", Chief Executive Bob Iger told analysts on a conference call after earnings, describing the moves as an "entirely new growth strategy" for the company.

He said, too, that the possibility still exists that Disney will license other titles to Netflix down the road.

In what's an obvious move, Disney will launch its own streaming service and open up its vast archive of Disney films and TV shows.




"Ultimately, we envision this will become a dynamic sports marketplace that will grow and be increasingly customizable, allowing sports fans to pick and choose content that reflects their personal interests", Iger said. While no one else now has the IP might of Disney, we are already seeing this stream-based channel approach adopted by Netflix's other big rival, Amazon.

Last August, Disney acquired a 33% stake in that company, which is a spinoff from Major League Baseball Advanced Media, for $1 billion.

Like many breakups, the one between Walt Disney (NYSE: DIS) and Netflix (NASDAQ: NFLX) might get a bit messy.

And, of course, this announcement has only been made possible by Disney's investment in BAMTech, which, according to Iger, appealed because of its advanced technological capability.

Disney didn't provide details on what the new over-the-top services are expected to cost.

This is not Disney's first attempt to go directly to the consumer. The new streaming services are a way to connect directly with consumers and take advantage of new viewing habits. 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.

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