Pay TV giant BSkyB and Walt Disney have agreed to extend a movie output deal and to start a new pay-TV channel in the UK and Ireland that will air new and old Disney films.
The deal renewal is the fourth by BSkyB in which Rupert Murdoch's News Corp owns a 39 percent stake.
As per the agreement, the financials of which are yet to be disclosed, BSkyB will get first subscription pay TV rights to Disney films including Pixar, Marvel and Lucasfilm releases along with expanded rights on various platforms including Sky on-demand, multiplatform service Sky Go and Now TV.
BSkyB has first-run rights to show movies from Lucasfilm and Marvel Studios, such as Iron Man 3 and Avengers Assemble across other Sky channels.
In addition, BSkyB will continue to provide Disney networks such as Disney Channel, Disney XD, Disney Junior, and Disney Junior HD, according to the terms of the deal.
In order to broadcast the films, the companies will create a new channel called Sky Movies Disney that will start airing on 28 March in both standard and high definition. It is for the first time Disney is involving in a co-branded linear movie channel anywhere in the world.
Sky Movies Disney will have first-run rights to the newest Disney films such as Brave, Tinker Bell: Secret of the Wings and Wreck-It Ralph, the companies said. In addition, the channel will offer classic Disney titles, such as Bambi, Pinocchio, Finding Nemo, Cars and A Bug's Life along with live action titles including Pirates of the Caribbean and National Treasure.
In line with the increased competition for customers among pay TV providers and video on demand services, BSkyB spends £2.3bn ($3.5bn, €2.6bn) per year on content, including first-run rights from Hollywood film studios, and exclusive sports and other entertainment broadcasts. For the six months ended 31 December, the company added 88,000 new customers, luring them with packages that combine TV, Internet and phone services.
Launched in the UK in early 2012, US-based video-on-demand service Netflix has been a major competitor for BSkyB in acquiring Hollywood movie rights. In order to overcome the competition, Sky has renewed its pay-TV deals with four major Hollywood studios, Disney, Sony, Universal and Warner Bros, since September 2012.