Disney is making an announcement that has already shaken the industry to its core. The entertainment giant will now be offering movies and TV shows directly to the viewers online. The innovation is expected to hit the market in the very beginning of 2018. Netflix and Kulu should be seriously worried with the direction the streaming services sector is heading.
“If you look at Disney’s businesses, except for the theme parks, virtually all of the businesses touch consumers through third parties, everything from big box retailers to the owners of motion-picture theaters,” says Disney’s CEO. “This is an opportunity to reach the consumer directly.”
Worse than expected Q2 results are responsible for the initiative. Company’s top management believes the step will not only eliminate unnecessary third-party involvement but also boost earnings and, as a result, revenues. Despite positive prospects, the market perceived the change negatively, sending both Disney and Netflix shares down.