Walt Disney Co. intends to offer its Marvel and Star Wars properties through the subscription video service it is planning to launch in 2019, rather than renewing a deal with Netflix Inc., according to Chief Executive Robert Iger.
Disney announced last month it would launch its own on-demand service in late 2019, and where it would offer animated and live-action family films that currently stream on Netflix after they run in theaters and are sold on DVD and in digital stores like Apple Inc.'s iTunes. However, Mr. Iger said at the time Disney wasn't certain if it would include Marvel and Star Wars movies on its own service or it would continue to license them to Netflix.
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In deciding to retain the rights to two of its biggest franchises, including superhero movies like "Avengers" and the annual "Star Wars" sequels and spinoffs, Disney is giving up tens of millions of dollars per movie it currently receives from Netflix. However, it will bolster the amount of premium content available on its own digital service and thus, Mr. Iger is betting, its appeal to consumers.
"We're going to launch big and we're going to launch hot," Mr. Iger said of the digital service, speaking at a media-business conference on Thursday.
For Netflix, Disney's decision will add to the pressure for it to create appealing original content of its own in order to replace some of the high-profile franchise films it will lose starting in 2019.
A Netflix spokesman declined to comment.
In addition to all of the movies Disney produces for theaters, typically around 10 a year, the company will produce four or five lower-budget movies exclusively for its new digital service, Mr. Iger said at the investor conference organized by Bank of America Corp.
It will also make four or five original series and three or four "television movies" of the type that currently run on its Disney Channel, Mr. Iger added.
The service will launch in the U.S. in late 2019 as movies that previously would have been on Netflix become available, Mr. Iger said, though it could launch earlier in other countries.
Disney is just beginning work on the digital service, which will be offered directly to consumers over the internet, and has yet to announce how it will be priced. Mr. Iger said the company will share details on how much it will spend on the service later.
As a part of the strategy, however, Disney last month said it would spend $1.58 billion to acquire majority control of streaming technology company BAMTech.
Disney will also next year launch a direct-to-consumer ESPN sports service. Mr. Iger announced no significant new details about it Thursday, reiterating that it will include about 10,000 annual events in sports such as baseball and hockey that currently don't run on live television, and that it will act as a hub allowing fans to subscribe to other specific sports leagues or events.
Successfully launching the new digital services is one of Mr. Iger's two top priorities in the remaining two years before his planned retirement in 2019, he said, along with lining up a successor for his own job.
Mr. Iger also said Thursday that Disney is feeling some financial impact from Hurricane Irma. The company has canceled three cruise itineraries and shortened others, he said, and some tourists are canceling previously planned trips to Walt Disney World in Orlando, Fla.
Write to Ben Fritz at firstname.lastname@example.org
(END) Dow Jones Newswires
September 07, 2017 12:55 ET (16:55 GMT)
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