Why Netflix and Disney Stocks Are Both Plummeting Right Now
You’re not the only one worried about Disney movies on Netflix—investors are too.
On Tuesday, Netflix stock dipped nearly 4% during after-hours trading after Disney said on an earnings call that it would stop streaming all its Pixar and Disney-branded movies on the streaming site starting in 2020, such as Moana, Pirates of the Caribbean: Curse of the Black Pearl, and The Jungle Book.
Disney also said it would not release any new movies to the platform starting with its 2019 lineup, which includes the Frozen sequel, the live-action Lion King, and Toy Story 4, according to a company press release.
Aww no more Disney movies on Netflix
– Erick Mac (@ateabigmac) August 8, 2017
Looks like I won’t be watching Disney movies streaming anymore. I have no need to get an ESPN streaming service. I don’t watch sportsball.
– Elizabeth (@misspentdays) August 8, 2017
People are sad they are raking Disney movies off Netflix, but I just wanna know when they’re going to out on episodes of ER??
– Mare Bear Pig (@marebear_pig) August 8, 2017
That decision comes as Disney plans to introduce its own streaming service with ESPN in 2019, featuring movies, TV shows, and other short-form content made by the company. While the entertainment giant also owns Marvel and Lucasfilm, the studios behind Captain America: Civil War and Rogue One, the company has not yet said if it will pull that content from Netflix too. Disney may consider licensing those films on stand-alone streaming services series like Netflix, but more concrete plans will be announced at a later date.
It’s not just shares of Netflix that are down on the news: During after-hours trading, Disney’s stock was also down more than 3%. The company’s overall third quarter earnings for this year were mixed, with earnings per share of $ 1.58 on revenue at $ 14.2 billion. Wall Street had expected earnings per share of $ 1.55 on revenue of $ 14.4 billion.
In 2012, Disney agreed to make Netflix the only subscription service to run all its films starting in September 2016. That deal reportedly costs Netflix millions—an estimated $ 300 million annually. Separately, Netflix also struck a deal in 2013 to release a series of interconnected Marvel shows including Jessica Jones and Luke Cage. That same year, Netflix and Disney said the epic would “unfold over multiple years.”
Disney executives said during their earnings call Tuesday that there would be “no change on our side” in regards to those shows.
Meanwhile, Netflix revealed Monday that it had acquired Millarworld, the comic book publisher behind Kick-Ass and Kingsman: The Secret Service. Some analysts say the purchase mirrors Disney’s purchase of Marvel in 2009.
Fortune has reached out to Netflix and Disney and will update this story if and when they respond.
