The mouse did not want to Netflix and chill, after all.
Disney announced on Tuesday it will end its distribution partnership with Netflix and will create its in-house streaming service. The partnership will officially end in 2019 when the service launches, according to Disney.
The pullout means new Disney movies on Netflix, such as “Moana” and “Rogue One”, has only a limited shelf life. Netflix will also miss out on upcoming movies such as “Toy Story 4”, the sequel to “Frozen“, and a live-action “The Lion King” re-make.
Netflix was just beginning to reap the fruits of an agreement signed with Disney in 2012. As part of the deal to exclusively stream new Disney movies, Disney opened its catalog to Netflix in 2016.
Netflix saw its after-hours stock price on Tuesday dip over 4 percent.
“US Netflix members will have access to Disney films on the service through the end of 2019, including all new films that are shown theatrically through the end of 2018,” said a Netflix spokesperson in a statement. “We continue to do business with the Walt Disney Company on many fronts, including our ongoing relationship with Marvel TV.”
Disney and Netflix enjoyed a turbulent relationship. In last December, Disney signed a deal with rival streaming site Hulu last December, handing over exclusive rights to stream 50 classic movies such as “Mulan,” “Pocahontas” and “Tarzan.” Disney owns 30 percent of Hulu.
In addition to creating its own streaming platform for movies and TV shows, Disney announced it will launch a ESPN video streaming service starting in early 2018.
The streaming services became a possibility after Disney became a majority stakeholder in BAMTech, a streaming technology and marketing company which helped create HBO Now and MLB.TV.
Disney, which already owned 33 percent of BAMTech’s shares, shelled out $1.58 billion to buy 42 percent of the shares formerly owned by Major League Baseball’s internet media branch.
Disney also reported a third-quarter profit of $1.58 a share, on revenue of $14.24 billion, while Wall Street analysts had expected Disney to earn $1.55 a share on $14.4 billion in revenue.
Disney’s after-hours stock price also dipped over 3 percent.
“This acquisition and the launch of our direct-to-consumer services mark an entirely new growth strategy for the Company, one that takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands,” said Disney CEO Robert Iger in a statement.
For Netflix, the news marks an end to a string of positive news in recent days.
On Monday, Netflix announced it purchased Millarworld, a Scottish indie comic books publisher which created Hollywood blockbusters Kick-Ass and Kingsmen.
On Tuesday morning, it announced that David Letterman was coming out of retirement to produce a six-episode show slated for 2018.
Photo: Netflix’s headquarters in Los Gatos, California. (Courtesy Netflix)
Tags: disney, Netflix