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Disney to start new streaming service
August 20, 2017, 11:59 am

Disney announced that it plans to launch its own streaming service in 2019, by when it would end its current distribution deal with Netflix.

The move is a real blow to Netflix, which secured a valuable streaming deal with Disney back in 2012 but saw it only begin to kick off in 2016, giving Netflix barely any benefit from its Disney deal.

However, Netflix will not lose its Disney movies right away. Disney says it plans to cut Netflix off starting with the studio’s 2019 films, and Netflix says it will be able to keep all the Disney movies it gets through the end of that year. That means Netflix should be able to stream the next two Star Wars movies, but it will miss out on the new trilogy’s final installment.

For Disney, launching its own streaming service makes sense as it has a huge library of valuable movies and shows to offer, which it could now do through downright sales or by subscription streaming.

Disney’s streaming service will be built using technology from BAMTech, in which Disney already is a major investor.

“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,” Disney CEO Bob Iger said in a statement accompanying the announcements.

The loss of Disney films will be a major disappointment for Netflix subscribers and will certainly make it harder for Netflix to find new ones. But it is something that Netflix seems to have been prepared for. The streaming service has reinvented itself over the past several years to become a home for original shows and movies, and this move from Disney both underscores the urgency of that and how correct a move it was.

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