A Mickey Mouse figure and other items are on display during a press preview for the upcoming auction "Walt Disney's Disneyland" at Van Eaton Galleries in Sherman Oaks, California, U.S., June 1, 2017.
Mario Anzuoni/File Photo
9 August 2017: Walt Disney Co's (DIS.N) shares fell 5 percent on Wednesday to their lowest in eight months as investors doubted whether the world's biggest entertainment company can succeed with its plan to launch its own streaming services rather than rely on Netflix Inc (NFLX.O) to reach online viewers.
Disney announced its plans on Tuesday alongside quarterly results showing further subscription losses as it struggles to keep hold of viewers defecting to online streaming services offered by Netflix, Time Warner Inc's (TWX.N) HBO and others.
Under its plan, Disney will stop providing new movies to Netflix starting in 2019, a deal analysts at RBC Capital Markets estimate earns Disney more than $100 million a year. Some on Wall Street have doubts that Disney can easily replicate that revenue stream.
"The Disney product is taking a very successful and settled part of the business model (pay TV economics for films) and putting it at risk in the hopes of building an asset with more long-term value," Cowen and Co analysts wrote in a research note.
Disney said the new services would be based on technology provided by video-streaming firm BAMTech, in which the media company is increasing its stake to 75 percent by paying $1.58 billion.
"This may initially create angst with investors as Disney gives up a 'bird in the hand' from Netflix, invests in BAMTech, content and probably accelerates pay TV subscriber declines," RBC Capital Markets analysts wrote in a client note.
(Reuters) - Walt Disney Co's (DIS.N) shares fell 5 percent on Wednesday to their lowest in eight months as investors doubted whether the world's biggest entertainment company can succeed with its plan to launch its own streaming services rather than rely on Netflix Inc (NFLX.O) to reach online viewers.
Disney announced its plans on Tuesday alongside quarterly results showing further subscription losses as it struggles to keep hold of viewers defecting to online streaming services offered by Netflix, Time Warner Inc's (TWX.N) HBO and others.
Under its plan, Disney will stop providing new movies to Netflix starting in 2019, a deal analysts at RBC Capital Markets estimate earns Disney more than $100 million a year. Some on Wall Street have doubts that Disney can easily replicate that revenue stream.
"The Disney product is taking a very successful and settled part of the business model (pay TV economics for films) and putting it at risk in the hopes of building an asset with more long-term value," Cowen and Co analysts wrote in a research note.
Disney said the new services would be based on technology provided by video-streaming firm BAMTech, in which the media company is increasing its stake to 75 percent by paying $1.58 billion.
"This may initially create angst with investors as Disney gives up a 'bird in the hand' from Netflix, invests in BAMTech, content and probably accelerates pay TV subscriber declines," RBC Capital Markets analysts wrote in a client note.
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