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Disney (DIS) Renews Distribution Deal With Google-Owned YouTube
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The Walt Disney Company (DIS - Free Report) reached a distribution agreement with Alphabet (GOOGL - Free Report) division Google’s YouTube TV to return access to its content from ESPN and FX and on-demand and live content after a two-day blackout.
The previous agreement expired on Dec 18, after which YouTube removed Disney-owned content from its platform.
Alphabet-owned Google’s YouTube also lowered its subscription prices by $15, from $64.99 to $49.99. Disney content remained off its site.
Disney’s shares are down 2.2% in pre-market trading on Dec 20. DIS has declined 17.9% year to date compared with the Zacks Media Conglomerates industry’s plunge of 44.7%. Disney has also underperformed its peers Netflix (NFLX - Free Report) , Comcast (CMCSA - Free Report) and Alphabet.
On a year-to-date basis, Alphabet’s shares have returned 61.8% compared with Netflix’s rise of 8.5% and against Comcast’s decline of 6.9%.
Image Source: Zacks Investment Research
Robust Content Portfolio to Drive Prospects
Although Disney shares have underperformed the industry’s and peers’ tallies year to date, its prospects are bright on the growing popularity of Disney+, driven by a robust content portfolio and cheaper bundle offering.
Disney+ currently offers nearly 700 movies and 11,700 episodes of television shows from brands like Pixar, Marvel, Disney, Star Wars and National Geographic. Disney has a huge line-up of movies all set to be released over the next year. Some of its upcoming movies include The King’s Man, Deep Water and Death on the Nile.
The solid content portfolio is expected to help Disney+ face competition from Netflix, which is still dominating the streaming market.
Disney has been focusing on sports streaming, especially Live Sports, which is expected to drive the company’s long-term growth. ESPN+ offers tournaments such as Major League Baseball (MLB), National Hockey League (NHL), Major League Soccer and UFC Lightweight Championship, among others.
Disney also provides a strong content portfolio to drive subscriber growth at Hulu. The service has been benefitting from original content such as The United States vs. Billie Holiday, Happiest Season, Plan B, Run and Bad Hair, among others. The return of the fourth season of The Handmaid’s Tale also amassed significant attention.
Partnership Deals to Expand Customer Base
In December, Disney inked a deal with Cox Communications, per which Disney+ will now be available for Cox’ Contour Stream player and Contour TV consumers. The deal will enable Contour subscribers to stream Disney+ releases like Marvel’s Black Widow, Hawkeye and The Beatles Get Back as well as Disney documentaries and classics.
Earlier this month, Disney also renewed its content carriage agreement with Comcast. The agreement will continue to make Disney’s lineup of sports, news, kids and family and general entertainment programs available to subscribers of Comcast’s Xfinity TV.
The multi-year agreement includes the continued distribution of Disney’s cable channels, such as the Disney branded channels, the ESPN networks, the FX Networks and the National Geographic channels
However, stiff competition is a headwind. Increasing cases of Omicron are a major risk for Disney’s cruise, park and movie businesses.
This Zacks Rank #5 (Strong Sell) is spending a significant amount on content and marketing to attract subscribers for its Disney+ streaming service. Considering Disney’s leveraged balance sheet, this is a negative news for investors. Total borrowings were $54.4 billion as of Oct 2, 2021, compared with $55.8 billion as of Jul 3, 2021.
Image: Bigstock
Disney (DIS) Renews Distribution Deal With Google-Owned YouTube
The Walt Disney Company (DIS - Free Report) reached a distribution agreement with Alphabet (GOOGL - Free Report) division Google’s YouTube TV to return access to its content from ESPN and FX and on-demand and live content after a two-day blackout.
The previous agreement expired on Dec 18, after which YouTube removed Disney-owned content from its platform.
Alphabet-owned Google’s YouTube also lowered its subscription prices by $15, from $64.99 to $49.99. Disney content remained off its site.
Disney’s shares are down 2.2% in pre-market trading on Dec 20. DIS has declined 17.9% year to date compared with the Zacks Media Conglomerates industry’s plunge of 44.7%. Disney has also underperformed its peers Netflix (NFLX - Free Report) , Comcast (CMCSA - Free Report) and Alphabet.
On a year-to-date basis, Alphabet’s shares have returned 61.8% compared with Netflix’s rise of 8.5% and against Comcast’s decline of 6.9%.
Robust Content Portfolio to Drive Prospects
Although Disney shares have underperformed the industry’s and peers’ tallies year to date, its prospects are bright on the growing popularity of Disney+, driven by a robust content portfolio and cheaper bundle offering.
Disney+ currently offers nearly 700 movies and 11,700 episodes of television shows from brands like Pixar, Marvel, Disney, Star Wars and National Geographic. Disney has a huge line-up of movies all set to be released over the next year. Some of its upcoming movies include The King’s Man, Deep Water and Death on the Nile.
The solid content portfolio is expected to help Disney+ face competition from Netflix, which is still dominating the streaming market.
Disney has been focusing on sports streaming, especially Live Sports, which is expected to drive the company’s long-term growth. ESPN+ offers tournaments such as Major League Baseball (MLB), National Hockey League (NHL), Major League Soccer and UFC Lightweight Championship, among others.
Disney also provides a strong content portfolio to drive subscriber growth at Hulu. The service has been benefitting from original content such as The United States vs. Billie Holiday, Happiest Season, Plan B, Run and Bad Hair, among others. The return of the fourth season of The Handmaid’s Tale also amassed significant attention.
Partnership Deals to Expand Customer Base
In December, Disney inked a deal with Cox Communications, per which Disney+ will now be available for Cox’ Contour Stream player and Contour TV consumers. The deal will enable Contour subscribers to stream Disney+ releases like Marvel’s Black Widow, Hawkeye and The Beatles Get Back as well as Disney documentaries and classics.
Earlier this month, Disney also renewed its content carriage agreement with Comcast. The agreement will continue to make Disney’s lineup of sports, news, kids and family and general entertainment programs available to subscribers of Comcast’s Xfinity TV.
The multi-year agreement includes the continued distribution of Disney’s cable channels, such as the Disney branded channels, the ESPN networks, the FX Networks and the National Geographic channels
However, stiff competition is a headwind. Increasing cases of Omicron are a major risk for Disney’s cruise, park and movie businesses.
This Zacks Rank #5 (Strong Sell) is spending a significant amount on content and marketing to attract subscribers for its Disney+ streaming service. Considering Disney’s leveraged balance sheet, this is a negative news for investors. Total borrowings were $54.4 billion as of Oct 2, 2021, compared with $55.8 billion as of Jul 3, 2021.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.