Disney set off a sonic boom in Hollywood by unveiling plans to start two Netflix-style services: For the first time in the streaming age, the world's largest media company had decided that embracing a new business model was more important than clinging to its existing one.
Disney's decision to better align itself with consumer trends — deemed "a rare and impressive pivot" by RBC Capital Markets — instantly reverberated through the entertainment industry. Disney's cable channels, which include ESPN, have long been seen as the reason many viewers were refraining from cutting the cord entirely. If Disney was going all in on streaming, the impact would be felt by almost every television company and cable operator.
As part of its announcement on Tuesday, Disney said that it would spend heavily on original programming for its entertainment streaming service and pull future Disney and Pixar movies from Netflix. That sent Netflix shares downward. The question seemed to be, how would Netflix, even with its head start in terms of audience and reach, manage without the mighty mouse? And would Disney's plunge into streaming encourage the likes of Discovery and Viacom to do the same, intensifying competition?
And would viewers who want to eschew traditional cable subscriptions eventually find themselves overwhelmed by the sheer number of streaming services they would need to cobble together to watch what they wanted to watch?
On Wednesday, as analysts and investors scratched for answers, few firm ones emerged. In a research report, Doug Creutz, an analyst at Cowen and Company, summed up Disney's streaming plans, especially for movies and television, as "aggressively" pushing "the traditional content business into terra incognita."
Underscoring the uncertainty, Disney's shares declined by more than 4 percent on Wednesday, to $102.83. The company reported a 9 percent decline in quarterly profit on Tuesday, which may have led to the sell-off. Wider weakness in financial markets did not help.
Disney investors may also be worried about the enormous spending it will take to build two streaming services. Some might have been underwhelmed by the company's plans or might have thought that the decision came much too late.
While a few ardent Disney critics held that view, most analysts applauded the company's move.
"What Disney is doing is a really big deal in terms of trying new things, and I don't think it even has answers to some of these questions, including what the services will cost," said Michael Vorhaus, president of Magid Advisors, a media and digital video consultancy. "But it's clearly not the end of linear television. It's not the end of Netflix."
Disney's streaming plans call for the introduction early next year of a subscription service to be built around ESPN's sports programming. It will be powered by BamTech, a technology company that handles direct-to-consumer video for baseball teams and HBO, among others. Disney paid $1 billion a year agofor a 33 percent stake in BamTech. On Tuesday, Robert A. Iger, Disney's chief executive, announced that Disney had accelerated an option to spend $1.58 billion for an additional 42 percent share.
But this still-unnamed subscription service is designed to protect the cable bundle, at least initially. The service will offer only sports programming that is not available on ESPN's traditional channels. Only people who also pay to receive ESPN the old-fashioned way (via a cable or satellite hookup) will be able to stream ESPN's core offerings, including N.F.L. and N.B.A. games.
Mr. Iger has also made an important calculation that Disney — unlike most of its competitors — has programming that is must-have in the old model (cable and satellite) and in the new (streaming). Put another way, Disney has the power to introduce streaming offerings around ESPN, Pixar films and Disney Channel shows without worrying about being dropped by third-party distributors, including upstarts like Sling TV and PlayStation Vue.
PlayStation Vue, for instance, tried to introduce a "skinny" television package without ESPN in March 2015 and drew little consumer interest. When PlayStation Vue started offering ESPN in spring 2016, the distributor quickly started gaining traction.
Children's programming, an obvious strength for Disney, has proved especially important for streaming services. Amazon last year acquired a significant amount of PBS's library of original series to exclusively stream on its service, and Netflix has said it expects to have 75 original children's programs by the end of next year.
Disney's announcement had an immediate impact on Netflix, as the news media raced to pit the two companies against each other, and some investors worried about Disney taking back its movies. (Starting in late 2019, new-release Disney and Pixar films will move to Disney's entertainment-focused streaming service.) On Wednesday, Netflix shares declined 1.5 percent, to $175.78.
Omar Sheikh, an analyst at Credit Suisse, said Disney's move "arguably reduces the consumer value of Netflix."
But most analysts contended that the news was less worrisome for Netflix than it would initially seem. "We don't view this as a strike at Netflix, as the content being pulled is actually rather limited," said Mr. Creutz of Cowan and Company.
Disney has not yet decided whether to pull its Marvel or "Star Wars" movies from Netflix. Netflix will not lose access to Marvel-branded television shows like "The Defenders" because Netflix is a co-producer of them.
Executives at Disney and Netflix declined to comment publicly on Wednesday. In a statement on Tuesday, Netflix said, "We continue to do business with the Walt Disney Company on many fronts, including our ongoing deal with Marvel TV."
Notably, Netflix has been building up a huge original movie operation, including spending the $90 million "Bright," a forthcoming Will Smith movie. Netflix plans to start making as many as 50 of its own movies annually.
BamTech, which Disney plans to use as the backbone of its streaming services, has substantial operations. But Disney faces a steep learning curve. By the time Disney even introduces its entertainment-based service in 2019, Netflix will have about 64 million subscribers in the United States and 158 million worldwide, according to BTIG Research.
Disney would probably contend that Netflix's head start is irrelevant.
"It's high time we got in this business," Mr. Iger told analysts on a conference call on Tuesday. "The profitability, the revenue-generating capability of this initiative is substantially greater than the business models we're currently being served by."
In the end, there was only one aspect of Disney's move that everyone seemed to agree on: The streaming boom is only beginning.
Netflix, Amazon, HBO Now, CBS All Access and Hulu (part-owned by Disney) are all barreling ahead online. FX is dipping a toe in the water with Comcast. AMC has done the same. And now comes Disney with two services, which will undoubtedly prod other entertainment giants to move beyond niche direct-to-consumer offerings.
The race for streaming supremacy, Mr. Creutz said, "may well accelerate problems for the whole ecosystem via atomization of content and an overpopulation of content apps."