Disney has shown its hand in an increasingly fierce battle to win over footloose digital viewers by announcing that it will cease to offer its latest content to Netflix from 2019 in order to seed its own rival streaming service.
As a result future fans of planned releases such as Toy Story 4 and Frozen 2 will be forced to go to Disney directly to stream their content although it is not yet clear if Marvel and Lucasfilm content will be similarly treated.
The world’s biggest entertainment company has had enough of relying on the infrastructure of others and plans to go it alone in the expectation that long-term subscription profits will be higher than immediate rental income from Netflix.
This must be weighed against the cost of building and maintaining its own servers and services to allow it to operate, all of which will depress revenues at a time when Disney-owned sports network ESPN finds itself losing subscribers and profits as it prepares to launch another streaming service come 2018.
Netflix has itself increasingly moved away from licensing the content of others toward producing its own homegrown shows, amassing a huge war chest with which to steal a march on the likes of Amazon Prime and HBO.
Outlining his strategy Disney chief executive Bob Iger said that the move would hand his company ‘much greater control over our own destiny in a rapidly changing market.’
The ESPN streaming service will arrive first offering 10,000 live matches and events each year in sports such as Baseball, Hockey and Football.