Will Disney be able to challenge Netflix?
By Joe Harker
With an extensive library of films it's a wonder Disney doesn't set up its own streaming service, particularly since any streaming site usually has a specific section for Disney movies. Hang on, that's exactly what they're going to do.
Disney plans to launch streaming services for its films and sports coverage, with the intention that both will go live in 2019. Disney films will disappear from streaming services like Netflix to deny alternative platforms to customers. They had previously been linked with an attempt to buy Netflix, but it now appears that they will try to compete with them. Disney CEO Bob Iger said: "It's been clear to us for a while that the future of this industry will be forged by direct relationships between content creators and consumers."
"When you have a strong fan base like Disney has, or ESPN, that creates all forms of other opportunities in terms of tapping into customer passion for the brand and connection to the customer."
Disney movies may be moving, but Netflix will keep showing Marvel TV shows. Disney owns Marvel, but popular superhero shows will continue to be shown on Netflix. This may be because several Marvel shows have an established Netflix audience, and it is possible that the streaming services holds the rights to broadcast earlier seasons of various shows.
Analysts see the move as understandable, but extremely risky according to Forbes. Customers were moving away from their cable packages, while ESPN incomes dropped by 22 per cent. Morgan Stanley analyst Benjamin Swinburne understands why Disney have made the move, even if it has been announced suddenly. He said: "Disney's direct-to-consumer announcement was both a sudden surprise and a long time coming.
"The future of the media business is clear and Disney's strategic pivot will better position the company for the long-term."
Bloomberg reports that having a competitor as powerful as Disney could be bad news for Netflix. The loss of extremely popular Disney and Pixar films might hit Netflix where it hurts, as the streaming service is currently spending large amounts of money on their own programmes and will need to ensure that subscriber numbers do not drop after losing so many popular films in 2019.
Are Disney making the right move in setting up their own streaming service, or do their competitors have nothing to worry about?