Netflix is getting bigger and bigger. After several years of agreement allowing Netflix to distribute the Disney content, the latter decided to stop it in order to concentrate on its future streaming service. Nevertheless, Disney movies and series will continue to air on Netflix until the end of 2018 when the partnership ends and will not be renewed.
To help do all that, Disney will acquire a high percentage of BAMTech. That is the streaming technology company owned by MLBAM, the Internet company owned by Major League Baseball. Disney already had a stake in BAMTech but will pay $1.58 billion to acquire 42% more.
A few months ago the rumor broke that Disney wanted to buy Netflix, as they have not gotten it has taken more drastic measures. The Disney announcement came along with a mixed quarterly earnings report which led shares of Disney and Netflix both decline by over 3%. Disney earned $1.58 a share with $14.24 billion in revenue. Analysts were looking for earnings of $1.55 a share on revenue of $14.46 billion.
The decision of Disney could give ideas to other studios and this scares the shareholders. Moreover Time Warner who has the HBO channel also wants to completely control the broadcast of its films and series that is why it develops its own service VOD. Netflix is now a competitor and not a distributor.
Disney’s CEO, Bob Iger, made the decision after seeing 23% lower revenues on cable channels for different SVOD platforms (Netflix, Amazon Prime Video, etc.). In addition to this, a dedicated sports service will be launched early next year, which would save the EPSN, which has lost about 5 million subscribers since 2013.
What will happen to the Marvel series?
The answer to this question we still do not know. Disney does not have to worry about its future service since the firm has big licenses like Marvel and Star Wars, which will allow to drain as many clients to its service of streaming since they each have a very big community. But it could be a big loss if they get Daredevil, Jessica Jones and the other heroes and put them on an exclusive Disney platform. Although they probably share the rights. For now there is nothing to fear.
As a curiosity, Disney also has a stake in Hulu. Disney executives said Tuesday that a multi-year agreement that puts Mulan, Pocahontas and others on Hulu will not be affected by the upcoming Disney service.