Television Business International

Disney takes on Netflix with own SVOD service

Digital-headerDisney StudiosThe Walt Disney Company is pulling all of its movies from Netflix in order to launch its own branded SVOD service.

Disney has had an first window pay TV output deal with on-demand market leader Netflix since 2012, but will not renew when the agreement ends in 2019.

Instead, it will play its future theatrical slates on the new, currently untitled platform, which will initially launch in the US alongside a branded ESPN sports SVOD service.

There will also be original and library programming, films and telemovies on the service when it debuts in late 2019.

This effectively puts Disney on a crash course with Netflix and Amazon, and comes just days after CBS revealed its SVOD offer, CBS All Access, was going international next year.

Reports last year pointed to Disney buying Netflix as a solution to gaining access to young adult audiences rejecting expensive pay TV subscriptions, but no deal was reached.

Netflix’s share price fell 4% upon on Disney’s announcement, but had risen slightly by the end of trading.

Disney already has a branded SVOD service in the UK, Disney Life.

Disney CEO Bob Iger told analysts on an earnings call to consider the new service as a “global product”, and said the move was “the beginning of what will be an entirely new growth strategy for the company”.

“The new service will become the exclusive home in the US for subscription video-on-demand viewing of the newest live action and animated movies from Disney and Pixar, beginning with the 2019 slate, which includes Toy Story 4, the sequel to Frozen, and The Lion King from Disney live-action, along with other highly-anticipated movies,” added Iger in prepared comments.

Disney has not yet decided whether Marvel Universe features and Lucasfilm movies, which include the Star Wars franchise, will sit on the service.

“We’ll also be making a substantial investment in original movies, original television series, and short form content for this platform, produced by our studio, Disney Interactive and Disney Channel teams,” said Iger.

“Subscribers will also have access to a vast collection of films and television content from our library.”

In order to launch the services, Disney has expanded its ownership of tech firm BAMTech from 33% to 75%

Disney’s third quarter results saw earnings fall 2% year-on-year, with cable and broadcasting income both down.

Overall revenues were US$14.24 billion, lower than the US$14.42 billion expected.