Walt Disney (NYSE:DIS) has been going through something of a transition. Its media network, which houses the ESPN sports business, has been the victim of its own success, hit by high prices, long-term contracts, and declining cable subscribers. This led to a 1% drop in revenue for the segment in fiscal 2017 and an 11% decline in operating income. The growth of streaming video and cord cutting will likely accelerate this trend going forward.

As a result, investors have been anxiously awaiting details of the company's own streaming offerings, which it announced late last year. First up will be an ESPN companion service, set to launch this spring, while the second is a Disney-branded service, which will arrive in late 2019. While the company has released plenty of details about the ESPN Plus service, little has been revealed about the other one.

Recent events have shed some light on the subject, and we now have a better idea of what Disney's streaming service will look like.

A young girl laying on a daybed wearing headphones, smiling and looking at a laptop.

Disney will maintain its wholesome image. Image source: Getty Images.

Family-friendly fare

In a move that would make its founder proud, Disney's namesake service will contain only family-friendly programming (no R-rated fare), consistent with the company's wholesome image. Content will include Disney's treasure trove of classic titles, as well as the newest live action and animated movies. The service would also include films and television shows that will be developed specifically for it. During its first 12 months, the as-yet-unnamed service is expected to debut four to five original movies, as well as five new television series, according to a report from Deadline Hollywood.

While plans for many of those shows are still under development, several revelations provide insight into Disney's strategy.

Charlie Bean, who helmed The Lego Ninjago Movie, will be directing a CGI/live-action reboot of Disney's animated classic Lady and the Tramp, according to The Hollywood Reporter. Bean is a known quantity for Disney, having directed the majority of the episodes for Tron: Uprising, which appeared on Disney XD. Bean also authored episodes for a number of kid-friendly shows like SpongeBob SquarePants, Samurai Jack, Dexter's Laboratory, and The Powerpuff Girls. The project will be produced by Brigham Taylor who headed Disney's highly successful live-action remake of The Jungle Book, as well as Pirates of the Caribbean: Dead Man's Chest.

Disney announced earlier this month that Emmy-nominated producer, director, and actor Jon Favreau would write a live-action Star Wars series that would be shown exclusively on its streaming service. Favreau directed the 2016 version of The Jungle Book and will be heading the upcoming remake of another Disney classic, The Lion King.

During the company's first quarter 2018 conference call, CEO Bob Iger said that Disney would be also be developing series based on Pixar's Monsters, Inc. and High School Musical, of Disney Channel fame. That's on top of potential reboots of The Muppets, The Mighty Ducks, The Parent Trap, and Honey, I Shrunk the Kids, according to reports, though no official announcements have been made regarding these titles. 

Cast members from High School Musical reunite on set.

Disney will reboot the popular series High School Musical for its streaming service. Image source: Disney.

A tried and true formula

On a conference call to discuss the pending acquisition of Twenty-First Century Fox, Iger pointed out that Hulu would be a ready outlet for edgier fare and content that didn't fit Disney's family-friendly image. The company has long stayed true to its founder's vision of wholesome, family entertainment.

While Disney has not yet revealed what consumers will pay for its service, Iger said on a conference call, "I can say that our plan on the Disney side is to price this substantially below where Netflix is." For comparison, customers pay $10.99 per month for the standard plan which allows streaming on two screens at a time, though a basic plan for only one screen is available for $7.99 per month. ESPN Plus has been priced at $4.99 per month. 

Now is the time

The introduction of these services comes at a critical time for Disney. Recent reports indicate that 55% of U.S. households subscribe to a paid streaming service, up 450% in under a decade according to Deloitte's Digital Media Trends Survey. The survey also found that consumers subscribed to three on-demand streaming services, on average, spending about $10 per month on each. The leader in the streaming market is Netflix, which boasted over 117 million subscribers worldwide, with more joining every quarter.

While Disney is a little late to the streaming party, you can never count out the House of Mouse, especially considering the library of content the company has been building for decades. I don't think streaming is a zero-sum game, as evidenced by the Deloitte report, and I suspect before long it could be Netflix, Disney ...  and everyone else.

Danny Vena owns shares of Netflix and Walt Disney and has the following options: long January 2019 $85 calls on Walt Disney. The Motley Fool owns shares of and recommends Netflix and Walt Disney. The Motley Fool has a disclosure policy.