Disney To Start Own Online Video Streaming Service In Competition With Netflix

Disney set to launch its own streaming services; will pull content from Netflix

Disney also announced it will launch its own streaming services, and plans to acquire a majority stake in BAMTech, a major streaming and marketing service. That will start to erode in 2019, when Disney will stop allowing Netflix the rights to any new movies.

One might imagine Disney is working hard on a brand name for their future streaming service, but even the best brand development companies wouldn't be able to come up with anything better than "Disney" itself.

Its Amazon Channels service has pre-empted the carving up of content, offering a place where you can stream dedicated channels from the likes of HBOGo, MGM, cult United Kingdom distributor Arrow Video and the Discovery Channel.

There will also be an ESPN video streaming service, which will include the MLB, NHL, and more.

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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. Further, because of this, Netflix plummeted to more than 5 percent.

Disney is still working out the specifics of the service, but the company said it would be the "exclusive home in the US for subscription-video-on-demand viewing of the newest live action and animated movies from Disney and Pixar".

"This lays the groundwork for the company to do a number of things", Iger said, speaking in a post-earnings interview with CNBC. The new service will be based on an "enhanced version" of the current ESPN app, which will continue to offer pay-TV subscribers access the ESPN programming on an authenticated basis.

Back when services like Netflix and Hulu were new, pundits and cord cutters predicted an avalanche of back catalogs and killer new shows would make cable companies, with their sky-high bills and ever-increasing pricing, completely obsolete.

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Disney said its new services would be based on technology provided by video-streaming firm BAMTech, and announced it would pay US$1.58 billion to buy an additional 42 percent stake in that company, which it took a minority stake in previous year.

This latter deal is the one that's wrapping up in advance of the 2019 launch of Disney's streaming service.

While there aren't many details about Disney's direct-to-consumer service-including cost, what it will look like, or what will happen with Marvel and "Star Wars" content-some analysts are optimistic on the services potential, mainly because of its content.

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.

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Disney is one of the most recognized names on Netflix, but it is not the first company to defect. The new streaming services are a way to connect directly with consumers and take advantage of new viewing habits. They will also be offering exclusive, original content to convince people to sign up and subscribe.

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