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Disney Chairman and CEO Bob Iger is the latest old media boss to up his bet on internet TV, as the Mouse House used its third-quarter earnings release to announce an ESPN-branded streaming service to launch in 2018 and a Disney-branded product the following year.
“This is an extremely important strategic shift for us,” Iger said on the company’s earnings call, underlining that streaming would be a top priority going forward.
And as part of its Disney-branded streaming service, the Mouse House will pull its new Walt Disney Studios and Pixar releases from Netflix beginning in calendar 2019, a year that includes hotly anticipated titles like “The Lion King” reboot and “Toy Story 4.” And in another gut punch to Netflix — whose stock dropped 3 percent in after-hours trading on the Disney news — Iger told analysts on the company’s earnings call that Disney plans to compete in the direct-to-consumer market with Netflix internationally.
“We’ll also roll out the service in multiple markets outside the United States,” Iger said. “You have to think about a Disney-branded direct-to-consumer service as a global product.”
Iger shared other details about the upcoming Disney-branded product, which will also include original series and films developed exclusively for it. The company has not yet decided whether to put its Marvel and Lucasfilm movies on the new service. Iger said Disney has modeled a range of prices for the streaming services, but wasn’t ready to share a price point yet –and added that the plans for the Disney and ESPN products were unveiled without input from its pay-TV partners.
“We have not had conversations with our distributors,” Iger said.
With regard to the ESPN service, Iger said there are no plans to port content from its linear channels to the internet product, citing “suboptimal circumstances” which he refused to elaborate on. He also mentioned up-sell opportunities within the service, such as selling access to a full game if a viewer is interested in a highlight show. And the new ESPN product could also provide Disney another distribution platform on which to add new sports rights, Iger said.
“We have more of an opportunity to license sports rights for this service,” he said.