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DIS - The Walt Disney Company (NYSE)

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Disney's Shanghai Disneyland resort has been operating for over a year now, and is beating the companies operating expectations and has achieved profitability ahead of schedule.




The Making of Shanghai disney

 
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Great interview but Disney specific at around the 38:30 mark.

Bought some DIS recently, reading this thread looks like I should of timed my switch to looking longer term a bit earlier...or is that short term thinking about longterm thinking???

 
The Walt Disney Company has unveiled its new Disney+ streaming service.

It will be the permanent home of all Disney owned content from the company including everything From the original Mickey short films through to Pixar, Lucas film and marvel, not to mention content they picked up in the take over of FOX.



 
The product looks fantastic, nn doubt it will be popular, will be interesting to see what the business is like, its becoming an increasingly crowded space. Up to now you could sign up to all the streaming services and be paying less in total than a cable subscription. Its now getting to the point where that has been exceeded and there will probably start being some consumer discretion.

I think the elephant in the room is live sport, so many people keep a cable service because of live sport and it the streamers can find a way to obtain and then provide live sport then that really will inlock the value in the sector.
 
galumay said:
The product looks fantastic, nn doubt it will be popular, will be interesting to see what the business is like, its becoming an increasingly crowded space. Up to now you could sign up to all the streaming services and be paying less in total than a cable subscription. Its now getting to the point where that has been exceeded and there will probably start being some consumer discretion.

I think the elephant in the room is live sport, so many people keep a cable service because of live sport and it the streamers can find a way to obtain and then provide live sport then that really will inlock the value in the sector.
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Disney has released the ESPN streaming service.

By offering direct to consumer streaming, they should be able to earn more per subscription than they could through the cable packages, by cutting out the middle man, and people don’t have to sign up for the full package.
 
I didn't realise that, I think thats a game changer, there will be some shakeout because the cost for the rights to live sport is so high, but given that Disney have to pay that whether they distribute via cable or direct I suspect that longer term Disney will do very well as a business on the back of Disney+ and ESPN+. If they can end up with FOX as well then I think they would be favourite to be dominant player despite the headstart Netflix and Prime have.
 
I don’t get Disney, Marvel and some of their brands, so I did not really comprehend how valuable the brands were until everyone else had kind of thing.


Star Wars though I love, its about the only movie I go and see at the movies and will be brainwashing my son with it as well. That was a massively under utilised brand and a great buy.


Using that same logic I can now see the value in the other brands they own. And some of the super fans I work with ram this point home. People love this stuff.


Streaming specifically, though I just don’t know. My thoughts are that the market is becoming so fragmented they will destroy each other, or at least keep margins tight. I and many others stopped torrenting due to the ease and low cost of the new streaming services. I never had Foxtel, too expensive for a bunch of stuff I didn’t watch. So it was torrenting up until I we got Netflix free with something, I cant remember what haha.


Now with the number of streaming services expanding, it is quickly becoming just as expensive as Foxtel was if you want access to all the content you enjoy. I am not sure everyone will signup for all these new services. I wont be. The new Star Wars TV series, ill buy it specifically or torrent it, but I wont sign up to Dis. I am no super fan and don’t watch much TV so I am not their target audience, I don’t think, so how big is their target audience and much of that can they get when people may already be at their limit for the number of streaming services they are prepared to sign up for.


I am sure they will expand the TV series catalog, but Dis are talking like people will sign up for a monthly subscription because they liked little mermaid as child.


Seems to be if you are not number 1 or 2 maybe 3 you will have limited market share
 
Value Collector said:
Disney has released the ESPN streaming service.

By offering direct to consumer streaming, they should be able to earn more per subscription than they could through the cable packages, by cutting out the middle man, and people don’t have to sign up for the full package.
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It certainly looks like it impressed the marked, here is the DIS chart...
dis 15.4.19.png
 
fiftyeight said:
Streaming specifically, though I just don’t know. My thoughts are that the market is becoming so fragmented they will destroy each other, or at least keep margins tight.
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Its certainly a key risk, like so many of the hyped up tech businesses, the hard part is really trying to understand the value in the businesses, how sustainable it is and whether there is any real competitive advantage. Otherwise one day the tide goes out and suddenly we discover everyone has no clothes.

Disney is more diversified, but has less expertise in the streaming space, Netflix has the early adpopter lead, expertise in streaming, but very reliant on its concentrated business, Prime has more capital to throw at it than anyone else, Apple have not yet really played their cards - and then there are all the incumbents in FTA & Cable. The secret to successful investing is unpicking all of that, separating the hype and narrative from the actual business and finding the long term 'winner'. If we had a major re-rating of the market Disney would probably be my preferred business in the space. Too expensive me now though!
 
fiftyeight said:
I am sure they will expand the TV series catalog, but Dis are talking like people will sign up for a monthly subscription because they liked little mermaid as child.


Seems to be if you are not number 1 or 2 maybe 3 you will have limited market share
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I don’t know, you might end up being exactly their target audience. (Although I am not sure they are releasing in Australia, hence the Stan deal and the reemergence of the weekly Disney Sunday movie)

Disney has hundreds of movies in their library, not just cartoons, heaps of stuff for kids and adults to.

For $6.99 a month a family like yours gets basically unlimited kids and teenage content eg every Disney cartoon and live action film ever made, and all the content that’s been made for the Disney channel over the years.

And you get all the Star Wars content new and old to enjoy while you brain wash the boy + marvel and the other shows etc.

As a kid In the 90’s I remember paying at least $7 a week to rent an overnight movie, so $6.99 per month is cheap for the vast amount of content this service will unlock.

As you pointed out foxtel etc are expensive, because the packages include stuff you don’t want.

The future of streaming is going to be families paying for just the services they want, basically creating their own bundles.


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Also keep in mind you can still rent or buy physical or digital copies of their content individually.

This Disney plus service is just an alternative to foxtel (cable) or Netflix subscriptions.

I can see it being more attractive than net flix to a lot of people, and a lot of family’s will probably want both Netflix and Disney, for $6.99 why wouldn’t you.
 
galumay said:
Its certainly a key risk, like so many of the hyped up tech businesses, the hard part is really trying to understand the value in the businesses, how sustainable it is and whether there is any real competitive advantage. Otherwise one day the tide goes out and suddenly we discover everyone has no clothes.

Disney is more diversified, but has less expertise in the streaming space, Netflix has the early adpopter lead, expertise in streaming, but very reliant on its concentrated business, Prime has more capital to throw at it than anyone else, Apple have not yet really played their cards - and then there are all the incumbents in FTA & Cable. The secret to successful investing is unpicking all of that, separating the hype and narrative from the actual business and finding the long term 'winner'. If we had a major re-rating of the market Disney would probably be my preferred business in the space. Too expensive me now though!
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Disney actually has a bit of experience in streaming already, they purchased BAM tech, and have been streaming sports and other channels for a while.

They also released a mini version of Disney + in the UK about 2 years ago, and have been using this a trial.
 
Charlie’s calculation at the 4.20 minute mark is classic.

Warren and Charlie on Disney.

 
Value Collector said:
For $6.99 a month a family like yours gets basically unlimited kids and teenage content eg every Disney cartoon and live action film ever made, and all the content that’s been made for the Disney channel over the years.
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Australians wont pay $6.99 and it wont stay at $6.99 for long haha

When it comes to capturing the minds of the young, I wonder how online gaming with huge titles like Fortnite eat in to this?

This may actaully turn out to be a positive thing for Netflix. They have mostly established them selves as the dominant player, but are spending huge money on content. I wouldnt think many would cancel Netflix for Dis, rather it is an additional subscription. So Netflix wont lose too many subs but no longer have to pay huge licensing fees and reduce the money spent on content creation for the markets Dis dominate
 
Fiftyeight, it shows how dynamic the sector is, lots of different possible futures, I reckon you may be wrong about Aussies not paying $6.99pm given the takeup of Netflix.

Online gaming no doubt takes some of the pie, but I suspect the pie is bigger as a result of it too.

One possible future is that it ends up like cable, someone agglomerates the streamers and you can pick a package to suit your family, because paying subs to Disney+, Netflix, Prime, Stan, etc becomes expensive and annoying. I wonder if this isn't what Apple will try to do, adding Spotify combined with Apple Music and agglomerated video feeds.

One thing we know about the future, we dont know what it will look like, and its almost certainly very different to the concensus view.
 
galumay said:
Fiftyeight, it shows how dynamic the sector is, lots of different possible futures, I reckon you may be wrong about Aussies not paying $6.99pm given the takeup of Netflix.

Online gaming no doubt takes some of the pie, but I suspect the pie is bigger as a result of it too.

One possible future is that it ends up like cable, someone agglomerates the streamers and you can pick a package to suit your family, because paying subs to Disney+, Netflix, Prime, Stan, etc becomes expensive and annoying. I wonder if this isn't what Apple will try to do, adding Spotify combined with Apple Music and agglomerated video feeds.

One thing we know about the future, we dont know what it will look like, and its almost certainly very different to the concensus view.
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One thing I know about the future is that Content is king, the rest is just distribution, Disney is definately the strongest player in content, especially now that they have the fox studios working for them too.

A lot of people will want both Disney and Netflix, others will just want Disney, some will just want Netflix and will probably end up buying or renting the Disney content as needed.

But year $6.99 or even $12.00 is super cheap for all the content you will have access to.

A new release movie costs $7 to stream as an over night rental, but for $7 you will get a new release every month on average, plus the entire library of past movies.

Netflix doesn’t tend to have the new releases.
 
galumay said:
LOL! One thing i know about the future is that its unknowable!
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One thing is true though, people want the content, the distribution model can change but and fortunes can be made and lost in distribution channels, but the people making the content people want will do well.

Take Snow White for example, it cost Disney $2 Million to make in 1935, and it is still producing income to this day.

It has been distributed in every thing from physical cans of film roll, Broadcast across airwaves from TV Antennas, through satellites into homes, cross country cables, VHS cassette, DVD and blue ray, and now streaming.

Distribution technology is always changing, who ever was making VHS cassettes must have felt like a king for a few years, but they were killed, but Snow White it’s self “content” survives and thrives across platforms, it simply moved to dvd and not streaming.

This is what I mean when content is king.

Netflix relies on others for most of its content, even its original series are often made by others, that’s a dangerous position.

Disney can afford to lose the streaming war, because others will still have to license Disney content if they become dominant at streaming, but Netflix is in a dangerous position, because of all the studios start restricting what they will licence to Netflix, it might become anemic and die.
 
I admire your conviction!

Regardless, its going to be interesting to watch the whole entertainment sector play out, now eSport is starting to become an important sub-sector so the business overall is quite dynamic.
 
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