Watch out Netflix, Walt Disney is launching its own video streaming service


Disney wants to be the new Netflix (Source: Getty)

Walt Disney aims to take a slice of the video streaming market with the launch of its very own service.

The entertainment company's shares dropped nearly four per cent in after-hours trading following the announcement.

The figures

Along with the strategic shift into streaming, Disney revealed net income attributable to the company fell to $2.37bn (£1.82bn), or $1.51 per share, from $2.6bn, or $1.59 per share, the previous year.

Revenue edged down slightly to $14.24bn from $14.28bn the previous year.

Shares in Disney fell 3.96 per cent to $102.74 while Netflix stock edged down 2.53 per cent to $173.85.

Read more: Walt Disney snaps up a fresh stake in struggling Euro Disney

Why it's interesting

Disney's new streaming service will be based on the technology of video streaming company BAMTech, and Disney said it would pay $1.58bn to buy another 42 per cent stake in the firm.

Chief executive and chairman Bob Iger called the move an "entirely new growth strategy" for Disney. "The media landscape is increasingly defined by direct relationships between content creators and consumers, and our control of BAMTech’s full array of innovative technology will give us the power to forge those connections, along with the flexibility to quickly adapt to shifts in the market," he said.

What Disney said

Iger said:

Today we announced a strategic shift in the way we distribute our content.

This acquisition and the launch of our direct-to-consumer services mark an entirely new growth strategy for the company, one that takes advantage of the incredible opportunity that changing technology provides us to leverage the strength of our great brands.

Read more: Taking the Mickey (Mouse): Walt Disney Co. delists Euro Disney