Disney is taking its movies out of Netflix and launching its own streaming service in 2019. Disney has also planned to open ESPN streaming service early next year. Pixar and Disney movies are expected to appear exclusively on this Online streaming portal, including shows and movies made specifically for the new service. There is no word on Marvel and Star Wars movies yet.
Disney is now buying a majority of BAMTech, a streaming technology company. Disney already owns a stake but will now pay BAMTech $1.58 billion for 42 percent more. Distribution begins with 2019 theatrical releases in the new Portal.
After the surprising announcement, Netflix shares quickly dropped 4%. The announcement was made during announcing quarterly earnings. This new service could see the upcoming Frozen 2 available for streaming exclusively. Star Wars: Episode IX is also set for release in 2019.
For the ESPN service, it’s still being worked out. In its new first year of launch, it’s expected that there will be streaming of an extra 10,000 sporting events more than what is on ESPN’s TV networks now.
Disney’s biggest segment is media networks. Earnings dropped by 1% year-over-year to $5.9 billion. Operating income is down 22 percent to $1.8 billion. ESPN was mainly to blame. ESPN’ has higher programming costs, lower ad revenue and costs due to severance packages for employees who leave the company. Broadcasting, though, didn’t perform much better than did cable, with the ABC television network also seeing higher programming costs and lower ad revenues.
Studio entertainment was down 16% to $2.4 billion and operating income fall 17% to $639 million.
Parks and resorts rose 12 percent to $4.9 billion and operating income grew 18 percent to $1.2 billion. Shanghai Disney Resort and Disneyland Paris are part of the growth figures.