The Walt Disney Company announced Tuesday that it would launch its own streaming service in 2019, which will involve pulling all of Disney’s content from Netflix before launch.
The announcement comes as Disney officials announced the company will pay $1.58 billion to acquire majority ownership of BAMTech, streaming service host, from MLBAM, the media company of Major League Baseball.
With majority ownership of BAMTech, Disney plans to launch an ESPN-branded sports streaming service early next year and a streaming platform exclusively for Disney and Pixar content in 2019.
“The media landscape is increasingly defined by direct relationships between content creators and consumers, and our control of BAMTech’s full array of innovative technology will give us the power to forge those connections, along with the flexibility to quickly adapt to shifts in the market,” Walt Disney Company CEO Robert Iger said in a news release.
Iger added that the acquisition marks a new strategy for Disney, while leveraging the “strength” of Disney’s well-known brands.
The ESPN streaming service will offer up to 10,000 live regional, national and international games or events every year, including MLB, NHL, MLS, Grand Slam tennis and college sports. Users will be able to access the new service through an upgraded version of ESPN’s app. The app will offer purchases of individual games.
“For many sports fans, this app will become the premier digital destination for all their sports content,” Disney’s news release said.
Investors have been concerned about ESPN's prospects for a while. Their big fear: ESPN might be facing long-term decline as more people quit cable or choose cheaper bundles without sports.
Over time, that could kick off a death spiral in which fewer subscribers mean less money for ESPN to use in bidding for sports rights; fewer games to air would then give more subscribers reason to quit.
But optimists believe ESPN has the clout to strike better deals with cable and satellite-TV companies, in essence allowing it raise prices and to enlist their help in signing up more households for its premium cable service.
The new Disney streaming service will become the “exclusive home in the U.S. for subscription video on demand,” of Disney and Pixar live action and animated movies, according to a news release. The company plans to create original movies and TV shows for the new service.
All of Disney and PIXAR-branded content on Netflix will be pulled beginning in 2019. Marvel and Star Wars related content may stay on Netflix, Disney officials said during an investors call.
Users will be able to purchase the Disney and ESPN streaming services via app stores.
The Associated Press contributed to this report.