Disney Announces It Is Pulling Movies From Netflix; Will Launch Streaming Service

Tyler Durden's picture

Disney served a big surprise moments ago when it reported reported Q3 revenue of $14.24 bn that missed the average analyst estimate, $14.42, even as Q3 EPS of $1.58, above the $1.55 expected.  That was not the surprise: what was is that Bob Iger's entertainment giant just made what was until recently a simmering war with Netflix, hot when the firm announced it would end its streaming act with Netflix, pulling its new release movies starting in calendar 2019, and instead it would launch it own ESPN direct-to-customer video streaming service in 2018.

The platform which will feature about 10,000 sporting events each year, will have content from the MLB, NHL, MLS, collegiate sports and tennis' Grand Slam events.

The announcement from Disney, which is now hoping to become more of a streaming company like Netflix, comes at a time when Netflix is spending billions of dollars on content, and is hoping to become more of a programming company like Disney.

From the press release:

The Walt Disney Company today announced that it has agreed to acquire majority ownership of BAMTech, LLC and will launch its ESPN-branded multi-sport video streaming service in early 2018, followed by a new Disney-branded direct-to-consumer streaming service in 2019.


Under terms of the transaction, Disney will pay $1.58 billion to acquire an additional 42% stake in BAMTech—a global leader in direct-to-consumer streaming technology and marketing services, data analytics, and commerce management—from MLBAM, the interactive media and Internet company of Major League Baseball. Disney previously acquired a 33% stake in BAMTech under an agreement that included an option to acquire a majority stake over several years, and today’s announcement marks an acceleration of that timetable for controlling ownership.


The media landscape is increasingly defined by direct relationships between content creators and consumers, and our control of BAMTech’s full array of innovative technology will give us the power to forge those connections, along with the flexibility to quickly adapt to shifts in the market,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company. “This acquisition and the launch of our direct-to-consumer services mark an entirely new growth strategy for the Company, one that takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands.”


The ESPN-branded multi-sport service will offer a robust array of sports programming, featuring approximately 10,000 live regional, national, and international games and events a year, including Major League Baseball, National Hockey League, Major League Soccer, Grand Slam tennis, and college sports. Individual sport packages will also be available for purchase, including MLB.TV, NHL.TV and MLS Live.


With this strategic shift, Disney will end its distribution agreement with Netflix for subscription streaming of new releases, beginning with the 2019 calendar year theatrical slate.


Plans are for the Disney and ESPN streaming services to be available for purchase directly from Disney and ESPN, in app stores, and from authorized MVPDs.

The announcement has sent both its and NFLX's shares tumbling.

Meanwhile, for those interested, this is what else DIS reported, courtesy of Bloomberg:

  • 3Q Cable Networks operating profit $1.46 billion, estimate $1.59 billion (Bloomberg News, average of 3)
  • 3Q Cable Networks revenue $4.09 billion, estimate $4.16 billion
  • 3Q media networks revenue $5.87 billion, estimate $5.88 billion
  • 3Q parks & resorts revenue $4.89 billion, estimate $4.83 billion
  • 3Q studio entertainment revenue $2.39 billion, estimate $2.34 billion
  • 3Q consumer/interactive revenue $1.09 billion, estimate $1.23 billion
  • 3Q media networks operating income $1.84 billion, estimate $1.96 billion
  • 3Q parks & resorts operating income $1.17 billion, estimate $1.11 billion
  • 3Q studio entertainment operating income $639 million, estimate $642 million
  • 3Q consumer/interactive operating income $362 million, estimate $376 million

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SloMoe's picture

Fire And Fury II

Shitonya Serfs's picture

Disney doesn't get that people are tired of cable and are happy with 1 source for video (maybe 2 with AMZN), but will not pay for Disney stream.

izzee's picture

Well OK then.  NFLX is STILL WORTH 271X earnings.  Even with a Cash Burn of how many billion?

OK Buy the Netflix DIP....SNAPchat

Michael Musashi's picture

All these streaming services will eat themselves. People want a clean neat package, and they don't want to shell out big bucks for it. I have Netflix for the kids, but that's all they get. They only watch an hour a day, if that, so no one complains.

Streaming service is just cable TV busted into 100 pieces, only the strong will survive.



besnook's picture

i have an indoor antenna that puts 14 channels on my tv and i only really need it for local news and a coupla hours/week of idle boredom. i have hulu, netflix and amazon for the kids and wife. i don't watch sports anymore because it is all about cheating for money and politics. disney is just as responsible as the rest of the media companies for making media a giant wasteland of mental numbness.

Karl Marxist's picture

Zappa said it best about TV and all the utter tripe and pedo and homo and "diversity" and fabriction as news and all actual news scrubbed for glorified tits and ass Krdashian and TMZ shit -- it's the slime oozing out from your TV set.

BLOTTO's picture

Walt Disney was a freemason.

Still Losing Money's picture

glorified tits and ass Krdashian - it is called the BOOB tube after all

I_rikey_lice's picture

"i have hulu, netflix and amazon"


I have torrents and Usenet. I get all movie/tv content for free plus I stream sports and PPV when I want to watch them. 

cheeseheader's picture

The only tv I have owned in the last 30 years sits in the box in the garage.  A Samsung, smart 40"er at that.  Currently for sale at craiglist.  Won it at our Christmas party. Such a deal I can make you!


Tv is for losers.

exi1ed0ne's picture

Throw the shit out the window. 15 min of content and 15 min of seizure enduing advertisements is not worth wasting electrons with.  I enjoy streaming, but god damn the fracturing of content across several services is going to be the death knell for it. 

Want to watch Game of Whores?  Get the GoW streaming app.  Just as expensive as a DVD, only per MONTH!

Fuck off already Hollywood.

Peacefulwarrior's picture

Watch out Disney has the content including Marvel! He who has the content wins

ebworthen's picture

Disney can enjoy their 100K subscribers.

How is the "Disney Channel" doing on Cable?

NDXTrader's picture

You must not have kids. Soon it will all be a la carte through streaming and you will pick 10-20 of your favorite providers for $50 a month. Disney will be one of those for most families, especially if the offer new content there exclusively

Shitonya Serfs's picture

Or pick nothing at all. Or watch the old DVDs. Or use the pirate services and watch movies that are in the theater (don't mind the shadows walking in front of the camera recording).

Disney used to have monopoly on their content and now with its brand dying thanks to the cost of its services and arabs, indians, and tacos running around the amusement parks....no thanks.

TuPhat's picture

We have netflix and Satellite.  The grandkids don't watch any Disney on Netflix.  Once in a while on satellite they watch Disney but their favorite animation is on Nickjr.  Nick isn't great but it is a lot better than Disney.  If they pull it off of Netflix that will be good.

Karl Marxist's picture

Just turn off yer fuckin' TV's to begin with. Become free men and women again, fer Chrissakes!

DosZap's picture

Households with NO children, will never PAY for a Disney channel, EVER.

waspwench's picture

And a lot of households with children will never pay for Disney channel EVER.

chubbar's picture

Great, one more fucking company I would need to subscribe to in order to get a complete movie package. Fuck this. I'm about done with these assholes.

Michigander's picture

Go to Daretv.com

Watch everything for free, including box office releases.

Long-John-Silver's picture

ESPN without a tie to Cable and Satellite TV subscriptions will effectively end Cable and Satellite TV. People will be free to cut the cord and only pay for Internet service. With a Cable or Satellite TV subscription running well over $100 a month switching to Disney streaming and dumping all those other channels no one watches for the Sports you watched on ESPN will be very easy. Disney is already on ROKU Streaming Boxes so adding ESPN will be easy. Then you have over 5,000 free channels on ROKU to fill in between games.

ThirdWorldNut's picture

Glad that my circus is taken care of. Now where is my bread?

NoWayJose's picture

Repeating the mistakes of cable. Everyone doing their own thing until cable cost $200 a month with different add on packages. Then people cut the cord. So if you want a half dozen channels of streaming you will still pay $200! Or drop it altogether!

True Blue's picture

A significant part of the outrageous cable bill is due to ESPN, and it is ESPN who bribed Congress to vote against an a'la carte cable programming bill several years ago.

Long-John-Silver's picture

You are assuming everyone switching from Cable/Satellite TV would subscribe to all those channels. 99% only watch 5 or fewer channels of the a little over 100 they currently get. Most of those channels are garbage and would never survive as a subscription streaming channel. If they run commercials and charge a subscription no one that streams will pay for it. Sling has discovered that and so have never had enough subscriptions to make a profit. The only way they would survive as a streaming (IPTV) internet channel is to make the channel free like Crackle or drop all the commercials like Netflix. To be honest most of their content is so poor from decades of no competition programming no one would watch even if they provided a free channel. I dropped Netflix when XTV became available because it's much better and best of all it's free. I do contribute a few bucks as the person that operates it takes donations for it's support. XTV is such a great channel someone could be very happy having that one channel on my ROKU menu with it's hundreds of high quality free IPTV sub-channels.

DC Beastie Boy's picture

Still available on ThePirateBay

bonin006's picture

Or buy DVDs at a pawn shop for $2.00 each

DC Beastie Boy's picture

Acutally, I do bu I just like fucking the cable companies, ie Comcast. 

So I download show and series' more than anything.

DosZap's picture

Why?, watch once, and sit and gather dust till you die.

Peacefulwarrior's picture

Whoa Netflix takin one to the can sideways..

northern vigor's picture

10,000 events per year is approximately 30 per day. Sounds like lots of soccer from the third world....shoot me now.

BeerMe's picture

It probably adds in olympic sports that have numerous events over the course of an hour.

LawsofPhysics's picture

Well.  I will say that one common problem that explains all the bullshit in today's world, far too many overcompensated useless paper-pushing middlmen...


Although, I don't necessarily know if the folks at disney will be any better at this business.  I guess it comes down to who owns the transmission network.  Better "rebalance" my communication stocks...

SantaClaws's picture

How many existing and potential Disney customers were repelled by Disney replacing its IT workers with H1B-visa immigrants, and requiring its existing IT workers to train their replacements as a condition for receiving a severance payment?  http://www.dailymail.co.uk/news/article-4037392/Disney-fired-250-America...

Ex-Oligarch's picture

At this point, almost no one remembers.  Our citizens have the attention span of a gnat.

Bill of Rights's picture

And to think I went short the Q"s near the close might put a
Dent in the NAS

H H Henry P P P Paulson's picture

Who wants to Disney And Chill?  Well, besides Anthony Weiner.

quesnay's picture

Ugh. Soon there will be 10 different steaming services all with exclusive rights to different crap.

Well back to bit-torrent it is then. When it was all in one place, it was just easier to pay for it.

DosZap's picture

How do you go to Bit Torrent without getting hacked/malwareed/adwared,Trojaned to death?.

KimAsa's picture

I can live without both, thank you. I have internet, superchillin and local channels.

Karl Marxist's picture

The Pedophile/homo Jewish attorney run Disney is setting itself up for their great demise. Didn't ABC, Disney owned, learn it's lesson from ESPN's demise? Stupid Jewish attorneys.

chosen's picture

Most of Disney is crap.   ESPN is complete crap.  Netflix movie selection is crap.    Not interested in crap.

NDXTrader's picture

All Disney has to do is promise some new Star Wars, Marvel, Frozen, Lion King, etc. content and they will have 5 million people signed up to stream in a week. Smart move

Ex-Oligarch's picture

I take it you bought the dip.

Father ¢hristmas's picture

"MLB, NHL, MLS, collegiate sports and tennis' Grand Slam events."

White boy shit.

chrsn's picture

Just like cable TV, I beat this game too.  

I don't watch Disney.