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.)

“This is an extremely important strategic shift for us,” Iger told the company’s investors of the new services. “I would put this at the top of our list in terms of the company’s strategic priorities in the next couple of years.”

In addition to animated and live-action features, the service will include library content from Disney Channel, Disney Junior, and Disney XD. Disney will also “invest significantly” to create original long-form and short-form content that will be exclusive to the service.

It is not clear if the studio’s library of classic animated shorts will be available on the service.

Also not clear: Disney has yet to decide if the service will include Star Wars or Marvel content, but Disney could potentially start another service for those or sell the rights to a third-party, like Netflix. Iger told investors yesterday: “We’ve also thought about including Marvel and Star Wars as part of the Disney-branded service, but there, we want to be mindful of the Star Wars fan and the Marvel fan, and to what extent those fans either overlapped with Disney fans or they’re completely basically separate, incremental to Disney fans. So it’s all in discussion.”

A price for the service has yet to be announced.

For more thoughts on Disney’s pivot into streaming – and what it means for both Disney and Netflix – see these thoughts by media analyst Peter Csathy.

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Amid Amidi

Amid Amidi is Cartoon Brew's Publisher and Editor-at-large.