Disney’s Resurgence & Streaming Plan

Disney is a huge name synonymous with providing movies, TV series and allowing children to live out their fantasies and playing out their dreams within their iconic parks. We have all either, in one shape or form watched a film or series produced by Disney’s huge conveyor belt of production. They are not strangers to us, but somehow if you ask most investors, they will probably tell you that you would not be able to find a holding position of these giants in their portfolios, but that could well change, if the future plans of the corporations are even 50% achieved. Let’s take a small look under the bonnet and look at some of their current strategies and some numbers.

The Walt Disney Company (NYSE:DIS) $124.96

Disney has performed incredibly well after launching its stream arm to bite into the ever-developing market share of streaming. Last week it announced that it surpassed Netflix in its number of streaming subscribers (Disney+, Hulu, and ESPN+ inclusive), and it beat analyst estimates in its quarterly earnings report for the quarter ending 30^th June 2022. Not bad for a newbie!

Its most famous business plan, its Disney parks have rebounded post-lockdowns, contributing $7.4 billion in quarterly revenue to Disney’s bottom line vs. $4.3 billion the year before and achieving this without the flow of international travel and cruise ships performing to the pre-pandemic days, so there is a lot of optimism, that these figures will be improved in time for next years’ financial EOY.

Another two markets the cooperation is looking into, is the purchase of image rights to show live sport in the NBL, NHL, and IPL to bring basketball, hockey, and cricket to global audiences, not to missed out from the billion pound market that sports betting, they are also looking into the industry to see if there is a good enough market to delve into and potentially announce a partnership with a well know company within the betting industry.

Of course, there are risks that these figures could have been impacted by a pent-up attitude post pandemic, from customers who have longed to visit for the last few years, but what was visible is that customers’ were looking to spend more per visit, to make the most of their time at the Disney parks. Is also fair to say, they are still somewhat behind Netflix in terms of the Average Revenue Per User (ARPU) for a Disney subscriber which is still significantly less than a Netflix subscriber. In other words, they might have surpassed the number of subscribers, but each subscription is still bringing in less money per client as a Netflix subscriber, perhaps this can be improved in time if they show enough value for money. One thing that is in their favour is the huge deep pockets that Disney has behind them that will help to compete with Netflix streaming services, for example, Disney is expected to spend circa of $30 billion on content in both the fiscal 2022 and 2023 years, compared to Netflix who is expected to spend $17 billion.

Disney rose 11.02% last week (8-12 August 2022).

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Source: Spaceship, Yahoo Finance, Google.