×
You will be redirected back to your article in seconds

Netflix Stock Falls After Disney Announces Plans to End Movie-Output Deal

Shares of Netflix dropped as much as 5% in after-hours trading Tuesday, after Disney announced it will end its first-run movie-output deal with the streaming giant starting with 2019 releases.

Netflix did not respond to a request for comment on Disney’s announcement. Disney said it plans to introduce its own direct-to-consumer Disney-branded subscription VOD service in 2019; it also is looking to bow an ESPN over-the-top streaming service early 2018.

Netflix’s stock closed at $178.36 on Tuesday, down 1.6% for the day. Following the Disney news, it was trading down another 3% as of 5:30 p.m. ET, at $173 per share. Netflix shares hit record highs last month after it topped Wall Street subscriber growth expectations for the second quarter of 2017.

Netflix and Disney inked the licensing pact for the pay-TV window in 2012, under which Netflix got U.S. streaming rights to the Mouse House’s films starting with 2016 releases. Netflix has had a similar “pay one” agreement for Disney titles in Canada starting with 2015 releases.

The impact will be felt on Netflix in the U.S. with the loss of staples from Disney’s 2019 theatrical slate, including “Frozen 2,” “Toy Story 4” and a live-action “The Lion King” from the Disney and Pixar lines. Still to be determined is whether Disney titles from the Marvel and Lucasfilm lines will remain on Netflix or get packaged in a Disney-branded OTT play.

Popular on Variety

“We have had discussion internally about how best to bring them to consumers,” Disney CEO Bob Iger said on a conference call with analysts and reporters Tuesday after reporting earnings. “It’s possible we can license to a pay service like Netflix but it’s premature to say what we can do.”

Just a few months ago, Wall Street was abuzz with speculation that Disney may move to buy Netflix. Instead, Disney has acquired majority control of the Major League Baseball-founded BAMTech streaming-video company — and will use that to launch its own Netflix-style subscription video services.

Iger made clear there’s no larger disagreement between Disney and Netflix, which will continue to have a range of deals in place for other content. “There’s no change from our side,” he said. “We’ve had a great relationship with them.”

More Digital

  • Tana MongeauStreamy Awards, Arrivals, The Beverly

    Streamy Awards 2019: The Complete Winners List

    The 9th Annual Streamy Awards — honoring the best from YouTube and online video — were held Friday night in Beverly Hills. Tana Mongeau (pictured above) was named Creator of the Year and Rhett & Link’s “Good Mythical Morning” won Show of the Year in the two fan-voted Audience Choice categories. David Dobrik picked up [...]

  • NBC News - Quibi

    NBC News Digital Workers Form New Union

    A group of approximately 150 editorial workers who help produce some of NBC News digital content have formed a union, citing a desire to push their employer to work more seriously through such issues as equal pay and the recent handling of sensitive stories. Editorial employees of NBC News Digital won certification of their union [...]

  • Fox Nation Tests Holiday Programming

    Fox Nation Tests Holiday Programming

    The Fox Nation streaming-video service has long been touted as a new option for super-fans of the Fox News Channel. But some of the broadband hub’s new programming choices suggest adherents of “Fox & Friends” and Sean Hannity aren’t looking solely for chatter about politics and interviews with members of the Trump administration. Subscribers to [...]

  • Facebook

    FTC May Stop Facebook From Integrating Whatsapp, Instagram

    The Federal Trade Commission (FTC) is weighing whether it should seek an injunction against Facebook to prevent the social media giant from integrating services like Whatsapp, Messenger and Instagram with its core app, according to reports from the Wall Street Journal and the New York Times. Regulators fear that Facebook’s app integration plans could make [...]

  • Ivanka Trump

    Ivanka Trump Reportedly Set to Speak at CES 2020

    Ivanka Trump, President Donald Trump’s daughter and an adviser to the president, is scheduled to appear on a panel at CES 2020 in January, according to a published report. Ivanka Trump will appear on a panel set for Jan. 8 at 3 p.m. at the Las Vegas confab with Gary Shapiro, president and CEO of [...]

  • Rooster Teeth - Joe Clary, Sean

    WarnerMedia's Rooster Teeth Names Co-Heads of Animation to Replace Gray Haddock

    Rooster Teeth’s Joe Clary and Sean Hinz are the new co-heads of its animation studio, replacing replace Gray Haddock, who recently left the company after he was moved out of his role as head of Rooster Teeth Animation earlier this year. The WarnerMedia-owned company, whose animated series include “gen:Lock,” “RWBY” and “Red vs. Blue,” promoted [...]

More From Our Brands

Access exclusive content