Disney will launch an ad-free Netflix-style subscription video service in 2019.
The announcement was made yesterday by Disney chief executive Bob Iger during an investor’s call. The yet-to-be-titled service is made possible by the expiration of Disney’s three-year streaming deal with Netflix, which ends in 2018. Netflix will lose access to its library of Disney- and Pixar-branded feature films; the company had been paying an estimated $300 million to Disney annually for the rights to stream 10 new Disney releases.
While the new service will make Disney a competitor to Netflix, the strategy is also designed as a hedge against “cord cutters,” the rapidly-growing number of people who are cancelling their cable and satellite subscriptions. (Disney also announced yesterday that it was also launching a second subscription service for its prized cash cow, the sports channel ESPN, which has been hit especially hard by the shrinking number of pay-tv subscribers.)