In its latest earnings report Walt Disney Co (NYSE:DIS) announced that it would pull its movies from Netflix, Inc. (NASDAQ:NFLX) and launch its own streaming service in 2019. It third quarter earnings revealed that the decline at ESPN has continued to eat into operating income. CEO Bog Iger said that the company’s relationship with Netflix was good and that it had no plans to pull Marvel shows from Netflix which are hugely popular.
The direct-to-consumer streaming service will launch in the United States and has plans to expand globally. The new platform will possess all Disney and Pixar movies going forward. Upcoming titles for Disney include Toy Story 4, Frozen 2, and the upcoming live-action version of The Lion King. Disney will also launch a streaming service for ESPN which will feature thousands of sporting events a year.
The decline of the cable industry has further driven the rise of providers like Netflix and other content creators like Amazon.com, Inc. and even those offered on cable like HBO which are expanding their online platforms. Original content is highly sought after, and Netflix has poured millions into producing some of its most popular original movies and television shows like House of Cards and Okja.
Disney stock has fallen 2% in 2017 largely because of weakness at ESPN. This move and the upcoming streaming services for sports, television, and movies demonstrates that Disney is committed to evolving in this changing environment.
