Disney Strikes Back: The Mouse Develops Its Own Streaming Network to Compete With Netflix

Media innovation and Disney go hand in hand. So a recent announcement that Disney would be creating its own streaming service wasn’t a huge surprise. What was interesting to some is that the Mouse had actually signed a deal with Netflix not too long ago.

What exactly does this mean for both sides? Let’s explore.

Partnership in 2016

Officer Judy speaks at a Zootopia press event.

Zootopia was available on Netflix shortly after its release in theaters.| Disney

The news of Disney’s new streaming service came as surprise to many, primarily due to the deal that Disney struck with Netflix last year. In May 2016, Netflix revealed in a blog post that it now held the exclusive streaming rights for all of Disney’s new releases.

A few months later, these titles became available on Netflix. Under Marvel, Captain America: Civil War and Doctor Strange appeared. Considering the Marvel TV shows on Netflix, this partnership made sense.

Additionally, Pixar films, such as Zootopia, and Lucasfilm projects, including Rogue One: A Star Wars Story, were available for viewing just months after their initial release in theaters.

Beta-testing DisneyLife

Pinocchio hangs by strings

DisneyLife attracted customers with old classic movies, like Pinocchio. | Disney

However, it would appear that during this time, Disney was beta-testing its own platform. Named DisneyLife, the streaming service was available only to those located in the U.K. It featured Pixar films, old Disney Channel TV programming, and Marvel Animated content.

The service has been around for approximately two years and has a lot going for it. This includes some unique extra features, such as music and live-streaming options for three separate Disney TV channels. Oh, and all of this was available for less than $10 a month.

Disney acquires BAMTech

A family sits on a couch together around a bowl of popcorn

Disney will offer tech-savvy families new streaming services. | Vadim Guzhva/Getty Images

Just over a year after the Disney-Netflix partnership announcement, it has been called off. Disney announced last week that it will be creating its own streaming service instead, set to launch in early 2019.

Additionally, Disney revealed that they have purchased majority shares in video streaming company BAMTech, whose technology they will use to create an “ESPN-branded multi-sport video streaming service.”

Original content and more

Teens laughing and watching a movie on a couch

Disney plans to bring original content straight to subscribers. | iStock/LightFieldStudios

What can we look forward to with this new service? At this point, what we know is that from 2019 forward, all new releases will be exclusively homed on the newly launched Disney-branded entertainment platform.

But just as Netflix worked its way up to original content, Disney plans to do the same. A “significant investment” will go into making this a reality, according to the official website announcement.

Other properties

Kevin Feige stands on stage in front of a screen displaying the lineup of Marvel's new releases.

President of Marvel Studios Kevin Feige onstage during Marvel Studios fan event | Alberto E. Rodriguez/Getty Images for Disney

Initially, it was unknown whether or not the deal will extend to the new releases from Marvel and Lucasfilm. However, Variety has now reported that these extended properties will indeed be moving to the new platform.

It’s worth considering how lucrative these other properties are, and what losing them will mean for Netflix and other streaming services. But Disney has been sinking a lot of dough into integrating Marvel Cinematic Universe characters and Star Wars elements into its parks, so fully integrating them makes sense.

Does this hurt Netflix?

Netflix user opens up the app on a phone.

Netflix playing on a phone | Kasinv/Getty Images

One question on everyone’s mind is how this might affect Netflix. The streaming service has experienced many ups and downs over the last couple of years. It received praise for quality at times, but also faced criticism for high production costs, potentially harmful content, and a lack of transparency when it comes to viewing numbers in the same breath.

But the stakes aren’t as high as they may appear. Variety cites an analysis of viewership, where it found that 80% of Netflix users spend a minimal amount of time viewing Disney content — and therefore will not be compelled to cancel their subscription should they lose those titles.

Future of Netflix

Shonda Rhimes attending a red carpet event for the Success Makers Summit

Producer Shonda Rhimes | Mike Coppola/Getty Images

While Disney moves forward, Netflix has its own planning to focus on. As many know, the service has put increasing focus on ramping up its original content, with a target 50% of spending allocated toward it over the next few years.

Additionally, Netflix has been making other lucrative deals. ABC powerhouse Shonda Rhimes has signed a deal to create new shows under her Shondaland umbrella for the streaming giant. And Millarworld, a comic book publisher whose works have spawned celebrated film series such as Kickass and Kingsman, was acquired by Netflix this month.

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