Disney said it will be pulling its movies from Netflix launch a Disney streaming service of its own in 2019. It also said Tuesday it will launch an ESPN streaming service early next year.
To help do all that, Disney will acquire a majority of BAMTech, the streaming technology company owned by MLBAM, the internet company owned by Major League Baseball. Disney already owned a stake in BAMTech but will pay $1.58 billion for an additional 42 percent.
ESPN has been losing TV subscribers for a few years and an online standalone product has been predicted for months, but ending a distribution agreement with Netflix beginning with the 2019 theatrical slate caught investors off guard, and Netflix shares quickly sunk 4 percent on the news in after-hours trading.
Disney CEO Bob Iger called the initiatives "a strategic shift in the way we distribute our content."
Disney made the announcements Tuesday while reporting quarterly earnings.
Shares of the conglomerate were falling 3 percent in after-hours trading after it reported quarterly revenue of $14.2 billion, about $180 million less than Wall Street expected. Profit, though, came in at $1.58 per share, three cents more than projected.
Disney's biggest segment, media networks, saw revenue drop 1 percent year-over-year to $5.9 billion and operating income plunge 22 percent to $1.8 billion, with ESPN mostly to blame.
Disney said ESPN's problems included higher programming costs, lower ad revenue and costs associated with severance packages for departing employees.
Broadcasting, though, didn't perform much better than did cable, with the ABC television network also seeing higher programming costs and lower ad revenue.
Studio entertainment saw revenue fall 16 percent to $2.4 billion and operating income fall 17 percent to $639 million, thanks in part to a decrease in home entertainment because Star Wars: The Force Awakens last year outsold Rogue One: A Star Wars Story this year.
Parks and resorts seemed a bright spot, as revenue rose 12 percent to $4.9 billion and operating income grew 18 percent to $1.2 billion, with Shanghai Disney Resort and Disneyland Paris contributing to the growth.
Revenue at consumer products and interactive media fell 5 percent to $1.1 billion, but operating income managed to grow 12 percent to $362 million.
Via hollywoodreporter
To help do all that, Disney will acquire a majority of BAMTech, the streaming technology company owned by MLBAM, the internet company owned by Major League Baseball. Disney already owned a stake in BAMTech but will pay $1.58 billion for an additional 42 percent.
ESPN has been losing TV subscribers for a few years and an online standalone product has been predicted for months, but ending a distribution agreement with Netflix beginning with the 2019 theatrical slate caught investors off guard, and Netflix shares quickly sunk 4 percent on the news in after-hours trading.
Disney CEO Bob Iger called the initiatives "a strategic shift in the way we distribute our content."
Disney made the announcements Tuesday while reporting quarterly earnings.
Shares of the conglomerate were falling 3 percent in after-hours trading after it reported quarterly revenue of $14.2 billion, about $180 million less than Wall Street expected. Profit, though, came in at $1.58 per share, three cents more than projected.
Disney's biggest segment, media networks, saw revenue drop 1 percent year-over-year to $5.9 billion and operating income plunge 22 percent to $1.8 billion, with ESPN mostly to blame.
Disney said ESPN's problems included higher programming costs, lower ad revenue and costs associated with severance packages for departing employees.
Broadcasting, though, didn't perform much better than did cable, with the ABC television network also seeing higher programming costs and lower ad revenue.
Studio entertainment saw revenue fall 16 percent to $2.4 billion and operating income fall 17 percent to $639 million, thanks in part to a decrease in home entertainment because Star Wars: The Force Awakens last year outsold Rogue One: A Star Wars Story this year.
Parks and resorts seemed a bright spot, as revenue rose 12 percent to $4.9 billion and operating income grew 18 percent to $1.2 billion, with Shanghai Disney Resort and Disneyland Paris contributing to the growth.
Revenue at consumer products and interactive media fell 5 percent to $1.1 billion, but operating income managed to grow 12 percent to $362 million.
Via hollywoodreporter
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