BURBANK, Calif. (Reuters) – Walt Disney Co on Thursday unveiled details of a family-friendly streaming service with TV shows and movies from some of the world’s most popular entertainment franchises in a bid to challenge the digital dominance of Netflix.
FILE PHOTO: Disney characters Mickey Mouse and Minnie Mouse attend the 25th anniversary of Disneyland Paris at the park in Marne-la-Vallee, near Paris, France, April 12, 2017. REUTERS/Benoit Tessier/File Photo
The ad-free monthly subscription called Disney+ is set to launch later this year and in every major global market over time, the company said. In addition to Disney films and TV shows, it will feature programming from the Marvel superhero universe, the “Star Wars” galaxy, “Toy Story” creator Pixar animation and the National Geographic channel.
Disney kicked off its presentation to Wall Street analysts at its Burbank, California, headquarters on Thursday with a video that demonstrated the breadth of its portfolio, showing clips from dozens of classic TV shows and movies from “Frozen” and “The Lion King” to “Avatar” and “The Sound of Music.”
Executives said they see opportunities to take its ESPN+ sport streaming video service to Latin America and are looking into international expansion of its Hulu streaming video business, which offers movies and shows targeted to adults.
The entertainment giant is trying to transform itself from a cable television powerhouse into a leader of streaming media. Chief Executive Bob Iger in February called streaming the company’s “No. 1 priority.”
Wall Street has pinned high hopes on the new service, which analysts expect would cost about $7.50 monthly and lure about 7.2 million U.S. subscribers in 2020 and 13.66 million by 2021, according to a poll of analysts conducted by Reuters.
The digital push is Disney’s response to cord-cutting, the dropping of cable service that has hit its ESPN sports network and other channels, and the rise of Netflix Inc. The Silicon Valley upstart has amassed 139 million customers worldwide since it began streaming 12 years ago.
The Mouse House, as Disney is known, will join the market at a time when audiences are facing a host of choices, and monthly bills, for digital entertainment. IPhone maker Apple Inc, AT&T Inc’s WarnerMedia and others plan new streaming services.
Disney has not yet announced a price for its new service.
To bolster its potential digital portfolio, Disney recently purchased film and TV assets from Rupert Murdoch’s 21st Century Fox and gained prized properties such as “Avatar.”
In a January regulatory filing, Disney reported losses of more than $1 billion for streaming-related investments in Hulu and technology company BAMtech.
Disney had been supplying new movies such as “Black Panther” and “Beauty and the Beast” to Netflix after their runs in theaters but ended that arrangement this year to feed its own streaming ambitions. The company estimated it is foregoing $150 million in licensing revenue this fiscal year by saving programming for its own platforms.
The Disney+ programming will draw in part from Disney’s deep library of classic family films. It also will include exclusive original content such as a live-action “Star Wars” series called “The Mandalorian,” a show focused on Marvel movie villain Loki, and animated “Monsters at Work,” inspired by hit Pixar movie “Monsters Inc.”
Some new Disney movies, such as a “Lady and the Tramp” remake, will go directly to the Disney+ app. Other new releases will appear on Disney+ after their run in theaters, executives have said.
Reporting by Lisa Richwine; Editing by Lisa Shumaker, Kenneth Li and Nick Zieminski