The service will be called ESPN Plus, and live inside a new app that will be launched by the sports broadcasting network in spring 2018 - much earlier than Disney's more general subscription streaming service that will launch in 2019.
On Disney's widely touted earnings call Thursday, The Wrap reports, CEO Bob Iger said, "Our plan on the Disney side is to price this substantially below where Netflix is". Iger said the company just closed a deal with Rian Johnson, who directed the installment that will be released in December, to develop an entirely new Star Wars trilogy.
Disney has announced that they are planning a bunch of new TV shows based on their most popular franchises. Iger also revealed that Disney's new service will be priced "substantially below" Netflix, at least when it initially launches.
Disney has big things planned for the future.
Netflix is now home to The Defenders line of Marvel shows, with The Punisher launching later this month; Hulu also has a new Marvel series, Runaways, set to debut on November 21. He also said that there will be a new TV series based on Pixar's 2001 film Monsters Inc. and another series based on High School Musical, as well as a new series from Marvel.
The catalog will include Disney's Star Wars and Marvel movies, as previously announced, and any new Marvel shows, which won't be produced exclusively for platforms like Netflix unlike Daredevil, Jessica Jones, Luke Cage and The Defenders.
Movie studio revenue dropped 21% last quarter to $1.4 billion and operating income declined 43% to $218 million.
ESPN continued to lose subscribers in its fiscal fourth quarter ended September 30 while programming costs for sports rights rose and advertising revenue declined.
The company's overall Q4 revenue slid 3% to US$12.8 billion versus the same quarter a year ago. It'll have a lot of high quality because of the brands and the franchises that will be on it that we've talked about.
"We continue to believe Disney's IP will drive significant value over the next five years despite the decelerating pace of growth at ESPN and recent investments into direct-to-consumer products", wrote Piper Jaffray analyst Stan Meyers, calling Disney the "best positioned" to leverage its content amid a fragmented media terrain.
Disney shares rose 2% to $102.68 before financial results were released late Thursday, and they were up slightly in after-hours trading.