Disney has announced plans to end its deals with streaming giants Netflix and Amazon and launch its own rival service.
The announcement saw Netflix stocks drop as much as 5% in after-hours trading, over fears of tough competition in the subscription video on demand (SVOD) territory.
Disney said it will end its first-run movie output deal with Netflix starting in 2019, meaning most of its films will no longer feature on other streaming platforms.
Instead, its ‘family focused’ films – including the upcoming Frozen 2, Toy Story 4 and live-action Lion King – will be available to the consumer on Disney’s own streaming service, which will launch first in the US and then globally.
There is no word yet on whether the move will include the Star Wars and Marvel franchises – by far Disney’s most profitable brands.
This is the bit which is leaving Netflix investors nervous – even after the company announced this week it was buying Marvel rivals Millar Comics,
Disney chief executive Bob Iger says the launch marks an entirely new strategy for the company, which takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands.
However, it isn’t entirely new, as Disney had previously launched a small streaming platform, Disney Life, in 2015, featuring children’s films and TV shows.
In an attempt to gain independence from Disney, Netflix is buying Millar Comics for an undisclosed sum estimated between $50m and $100m (£39m-£77m), in its first acquisition in 20 years.
Millar Comics includes the likes of Kick-Ass and Kingsman: Secret Service, which have all been made into major motion pictures.