One of the biggest entertainment companies in the world is Disney and ever since former President Michael Eisner, Disney has been trying to monetarize all its holdings. Most people in the world like Disney and if they have gone to their theme parks or cruises for holidays, they were not disappointed. Over the years Disney branched out from cartoons to retail stores, to movies to Marvel Entertainment, Star Wars, ABC TV and recently purchased the movies division of 20th Century Fox. With these very popular holdings, including in the last few years the Marvel movies leading the box office attendance, a streaming service is the latest product from the company.
The movies have pushed up the stock price and on November 12, there will be an alternative to Netflix. For someone to pay for one streaming service over the next, it is highly possible Disney will be a first choice which would continue to push up the price of Disney. It could be people want at least 2 paid services, which service would you subscribe to? As you listen to others, what will they do? If you think you are the norm, then buying Disney and selling Netflix is a good idea, although now that Disney has given a date to launch Netflix has to do something to keep and grow its subscribers.
Linking to dividend paying stocks, as investors we like subscription services because it generates or can generate healthy streams of income. It is up to the companies to entice people with the correct price and then over the years slowly raise them to include greater profits, but if the numbers of people subscribing meet or exceed Disney’s expectation it will another reason to like the stock.
There are more questions than answers, till the next time – to raising questions.