Netflix Stock Falls as Disney Streaming Deal Ends

Netflix has been enjoying rapid growth both at home and internationally, leading to steady growth in its stock price over the last decade. That relentless success couldn’t last forever, however, and now Netflix has encountered what might be a major setback. Just this week, Disney has announced that it will be pulling its new releases from Netflix, causing a 1.6% drop in Netflix’s stock price. Sure, that’s bad news for the streaming giant, but far from the worst part of the news.

As it turns out, Disney is likely eyeing the launch of its own streaming service. Given that Disney now owns the Star Wars franchise, many of the most beloved family films of all time, and countless other hot properties, a dedicated Disney streaming service will likely be a big hit, particularly for households with children. Any future Disney streaming service is still all speculation, however. Disney CEO Bob Iger said in a conference call with investors that while a streaming service would be successful, it’s not set in stone yet:

We have had discussion internally about how best to bring them to consumers. It’s possible we can license to a pay service like Netflix but it’s premature to say what we can do.

With new Lion King, Frozen, and Toy Story films on the way, Disney could essentially print money by launching a streaming service – particularly if they released their newer theatrical run films with simultaneous straight-to-streaming releases. The Disney-owned ESPN network is also rumored to be gearing up for a sports streaming service launch sometime in 2018.

Disney and Netflix first signed an agreement in 2012, but that deal didn’t take effect until 2016. Since then, many recent Disney releases have become some of the most-watched films and series on the streaming service.

Netflix has yet to respond for comment about the loss.