$Walt Disney(DIS)$ reports earnings on Thursday, and I think the biggest news will be ESPN over the top in "early fall".
I think "early fall" means before the NFL season begins because it creates urgency.
I'm looking for 2 things to make this a hit.
1. More Content
ESPN's content alone is a compelling product, but it's not a "no-brainer", even for sports fans. What would make it a "no-brainer"?
Fox doesn't have a streaming service but has valuable content like the NFL, MLB, NASCAR, and college football.
Fox should be looking for the biggest check, which isn't going to come from Max or Peacock, who are struggling. And Netflix doesn't want to license sports.
The natural pick is ESPN.
2. Price
Today's Disney triple-play bundle starts at $16.99 and goes up to $26.99 for no ads.
I think they get aggressive and say that for $18/month you can get the ads tier, and the no-ads tier will be $30 per month.
They want the triple-play sub number to be over 50 million, not a max of 24.9 million, as it stands today.
In time, 100 million+ triple-play subs are in the cards.
And prices will go up over time.
I think we start reasonable -- just like Disney+ and $Netflix(NFLX)$ did -- and price ratchet up. In 5 years, Disney's streaming offering will be $50 per month, or more.
So, let's do some math.
100 million subs * $50/mo = $60 BILLION in revenue per year!
And that's probably under-selling it when you consider single service subscriptions and ads. Is $100 billion possible? Sure!
Netflix generated $40.2 billion in the past year.
Yes, I think Disney's streaming business can be bigger than Netflix's. And probably sooner than you think.
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