Why is Disney separating from Netflix

Disney separates from Netflix and announces its own streaming services

Initially, the in-house sports broadcaster ESPN's program should be available on the Internet in the coming year, followed a year later by a streaming service for Disney's films and series, which - at least initially in the USA - should only be available there on the Internet.

For this, Disney will cancel the exclusive deal with the streaming service Netflix for the home market. Netflix shares fell more than three percent in after-hours trading on Tuesday.

Disney's move could accelerate the change in the American TV landscape. So far, channels like ESPN have mostly been accessible via cable and satellite contracts. But thanks to streaming services such as Netflix and Amazon Video, so much content is already available online that more and more households are canceling their expensive TV subscriptions. That is why Disney boss Robert Iger is now looking for a direct line to consumers in a strategic turnaround.

Other broadcasters are already following this path. The payment channel HBO shows its program online and the broadcasting group CBS only announced on Monday that it would also offer its streaming offer internationally. Disney with its range of popular children's characters, the animation studio Pixar as well as the Marvel superheroes and "Star Wars" is in a league of its own as a crowd puller.

Drop in profits as a warning

The numbers for the past year were an alarm signal that Disney had to change something. Compared to the same period last year, profits fell nine percent to $ 2.4 billion in the three months to early July. Revenues fell slightly to $ 14.2 billion.

A central problem was higher program costs and the decline in users continues to cause problems for the sports broadcaster ESPN. The operating profit of the TV division, which also includes the ABC broadcasting group, fell 22 percent to 1.84 billion dollars.

The film division was unable to match the box office successes of the previous year, only business with theme parks was booming. On the stock exchange, both the quarterly figures and Disney's future plans were not particularly well received: the share lost 3.8 percent after the hours.

Participation in tech providers

In order to cope technically with the offensive in streaming, Disney is increasing its stake in the technology provider BAMTech from 33 percent to the majority of 75 percent for around 1.6 billion dollars. Netflix already sparked speculation about a possible end to the Disney deal when the streaming service announced the purchase of the comic book publisher Millarworld at the beginning of the week with already filmed series such as “Kick-Ass” and “Kingsman”.

Netflix is ​​currently running superhero series with Disney-owned Marvel characters such as "Daredevil". This cooperation should continue, it said on Tuesday. Netflix, which has been relying on its own series and films for years, has obviously secured itself against the loss of Disney content with the acquisition. (SDA)

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