The new Disney branded direct-to-consumer streaming service will launch in 2019, putting the firm in direct competition with Hulu, Netflix, Amazon and others.
The company will also launch its own ESPN video streaming service in early 2018.
The platform, which will feature about 10,000 sporting events each year, will have content from the MLB, NHL, MLS, collegiate sports and tennis’ Grand Slam events.
The current plan is for Disney and ESPN streaming services to be available for purchase directly from Disney and ESPN, in app stores, and from authorized pay-TV partners.
‘We felt that having control of a platform we’ve been very impressed with after buying 33 percent of it a year ago would give us control of our destiny.’
Netflix played down the effect of Disney’s announcement, and said it would continue to do business with Disney globally, including its relationship with Disney’s Marvel TV.
‘U.S. Netflix members will have access to Disney films on the service through the end of 2019, including all new films that are shown theatrically through the end of 2018,’ the company said in a statement.
Disney will end its distribution agreement with Netflix for subscription streaming of new releases, beginning with the 2019 calendar year theatrical slate.
Netflix stock dropped more than 5 percent upon announcement of the news.
Disney is one of the most recognized names on Netflix, but it is not the company first to pull away. Starz Entertainment in 2011 said it would pull its movies and shows from Netflix due to a dispute over pricing of the roughly 1,000 films in the Starz catalog on Netflix at the time.
It comes as Disney reported a near 9 percent fall in quarterly profit, pulled down by higher programming costs and declining subscribers at its flagship sports channel ESPN.
The company also said it would pay $1.58 billion to buy an additional 42 percent stake in video-streaming firm BAMTech to power its new service.
Last year, Disney said it was taking a 33 percent stake in BAMTech for $1 billion.