Make us your home page
Instagram

Disney to launch streaming services for movies, live sports

The Walt Disney Co. logo appears on a screen above the floor of the New York Stock Exchange on Aug. 7, 2017. [Associated Press]

The Walt Disney Co. logo appears on a screen above the floor of the New York Stock Exchange on Aug. 7, 2017. [Associated Press]

NEW YORK — With new streaming services in the works, Disney is trying to set itself up for a future that's largely been framed by Netflix: Providing the stuff you want to watch, when you want to watch it.

The Magic Kingdom is launching its own streaming service for its central Disney and Pixar brands and another for live sports. That would allow it to bypass the cable companies it relies on — and Netflix — to charge consumers directly for access to its popular movies and sporting events.

"They're bringing the future forward. What they talked about were things that looked inevitable, at some point," said Pivotal Research Group analyst Brian Weiser. What's less clear is if Disney will be able to make big bucks from it, he said.

This is important as the decline in cable households and the shift to smaller, cheaper bundles pressures the profitability of Disney's cable networks. Fewer subscribers and fewer viewers mean less money. In the nine months through July 1, cable networks' operating income fell 13 percent from the year before, to $4.12 billion.

KID STUFF

Starting in 2019, the only subscription streaming service with new animated and live-action Disney and Pixar movies will be the Magic Kingdom's own app. That will include Toy Story 4 and the sequel to the huge hit Frozen. Older movies will be there too, as well as shows from the TV channels Disney Channel, Disney Junior and Disney XD, and original TV and films. That could be hugely attractive for families with young children in the U.S.

Disney is ending an exclusive earlier movie deal with Netflix, and the streaming giant's shares tumbled in after-hours trading. Netflix today has grown into an entertainment juggernaut in its own right, however, as it focuses more on its own exclusive programming.

Netflix already seemed to be bracing for the potential loss of the Disney movie rights earlier this week when it announced its first-ever acquisition — the purchase of Millarworld , a comic book publishing company that will develop films and kids shows based on its portfolio of character.

Disney might bring more of its properties — particularly its Marvel superheroes and the Star Wars franchise — under its wing, and could even offer them as separate streaming services. CEO Robert Iger said Disney is considering whether it should continue licensing Marvel and Star Wars movies to outside services like Netflix, move them into the Disney app or develop individual services for them.

The Disney service will be available in "multiple markets" outside the U.S. as well, taking advantage of Disney's global name recognition.

SPORTS

Disney had already said it would be launching a streaming ESPN service. It's not meant to compete with the company's TV channels.

The sports service is coming in early 2018, a little later than previously announced, and will air baseball, hockey and soccer games, tennis matches and college sports through ESPN's popular mobile app. Notably, ESPN will not be streaming pro football or basketball, at least initially.

Customers will also be able to buy fuller streaming packages from the baseball, hockey and soccer leagues, and watch them on the ESPN app.

"Ultimately, we envision this will become a dynamic sports marketplace that will grow and be increasingly customizable, allowing sports fans to pick and choose content that reflects their personal interests," Iger said on a conference call with analysts.

Disney will have to be careful that it doesn't transfer too much sports programming from its TV channels to the app. Getting the balance wrong could upset cable companies and weigh on the price they pay Disney for ESPN, Weiser said.

THE BACK END

To roll out its streaming services, The Walt Disney Co. will take majority control of BAMTech, a streaming arm of Major League Baseball spun off last year from Baseball Advanced Media, for $1.58 billion. When the deal closes, Disney will own 75 percent of BAM Tech, up from the 33 percent stake it acquired for $1 billion as part of an agreement announced last year.

The acquisition and the new services will be "an entirely new growth strategy" for Disney, Iger said.

The new streaming services will likely "accelerate the erosion" of Disney's TV networks, especially if other major cable networks make similar moves, said Moody's analyst Neil Begley.

But Iger argues that BAMTech gives Disney "optionality" if the cable ecosystem changes further, Iger said on a conference call with analysts Tuesday. If there's greater "erosion" — say, if more people drop cable bundles or choose cheaper bundles without key Disney channels — the company has more ways to get its entertainment directly to customers, Iger said.

He said there are no current plans to sell the Disney or ESPN TV channels directly to customers on the apps.

But having a direct relationship with customers tells Disney exactly what they're watching, giving it powerful tools and information that could help feed decision-making and, on the sports side, sell advertising.

Disney to launch streaming services for movies, live sports 08/09/17 [Last modified: Wednesday, August 9, 2017 7:56am]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Associated Press.
    

Join the discussion: Click to view comments, add yours

Loading...
  1. Massachusetts firm buys Tampa's Element apartment tower

    Real Estate

    TAMPA — Downtown Tampa's Element apartment tower sold this week to a Massachusetts-based real estate investment company that plans to upgrade the skyscraper's amenities and operate it long-term as a rental community.

    The Element apartment high-rise at 808 N Franklin St. in downtown Tampa has been sold to a Northland Investment Corp., a Massachusetts-based real estate investment company. JIM DAMASKE  |  Times
  2. New York town approves Legoland proposal

    News

    GOSHEN, N.Y. — New York is one step closer to a Lego dreamland. Goshen, a small town about fifty miles northwest of the Big Apple, has approved the site plan for a $500 million Legoland amusement park.

    A small New York town, Goshen approved the site plan for a $500 million Legoland amusement park. Legoland Florida is in Winter Haven. [Times file  photo]
  3. Jordan Park to get $20 million makeover and new senior housing

    Real Estate

    By WAVENEY ANN MOORE

    Times Staff Writer

    ST. PETERSBURG —The St. Petersburg Housing Authority, which bought back the troubled Jordan Park public housing complex this year, plans to spend about $20 million to improve the 237-unit property and construct a new three-story building for …

    Jordan Park, the historic public housing complex, is back in the hands of the St. Petersburg Housing Authority. The agency is working to improve the 237-unit complex. But the latest plan to build a new three-story building for seniors will mean 31 families have to find new homes. [LARA CERRI   |   Tampa Bay Times]
  4. Coming soon at two Tampa Bay area hospitals: a cancer treatment that could replace chemo

    Health

    A new cancer treatment that could eventually replace chemotherapy and bone marrow transplants — along with their debilitating side effects — soon will be offered at two of Tampa Bay's top-tier hospitals.

    Dr. Frederick Locke at Moffitt Cancer Center in Tampa is a principal investigator for an experimental therapy that retrains white blood cells in the body's immune system to fight cancer cells. The U.S. Food and Drug Administration approved these so-called "CAR-T" treatments for adults this month. In trials, 82 percent of cases responded well to the treatment, and 44 percent are still in remission at least eight months later, Locke said. [CHRIS URSO   |   Times]
  5. Regulator blasts Wells Fargo for deceptive auto insurance program

    Banking

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.

    Wells Fargo engaged in unfair and deceptive practices, failed to properly manage risks and hasn't set aside enough money to pay back the customers it harmed, according to a confidential report by federal regulators.
[Photo by Spencer Platt/Getty Images, 2017]