The Walt Disney Company
DIS
is
hiking the monthly subscription price of ESPN+
by $3 or 43%. Per Reuters, ESPN+ subscription will now increase to $9.99 on monthly basis beginning Aug 23. Annual subscription prices will go up to $99.99 from $69.99. However, the company will not hike price for the subscribers using the bundled services.
Disney’s cheaper bundled services (Disney+, ESPN+ and Hulu) has been able to attract subscribers amid stiff competition from the likes of
Netflix
NFLX
,
Apple
’s
AAPL
streaming service Apple TV+, Amazon Prime Video, HBO Max, Peacock, Paramount+ and TikTok.
Disney+ garnered 137.7 million paid subscribers within a short span of its availability (launched Nov 12, 2019). Hulu and ESPN+ had 45.6 million and 22.3 million paid subscribers, respectively, at the end of second-quarter fiscal 2022.
Disney’s focus on sports streaming, particularly live sports, is expected to drive growth for ESPN+. For instance, ESPN+ offers tournaments like UFC Lightweight Championship, Major League Baseball, National Hockey League, Major League Soccer, Grand Slam tennis (Wimbledon and the Australian Open), and live sporting events, original shows, series and documentaries.
Disney+: Key Growth Driver for Disney
Disney shares are having a terrible 2022. The company’s profitability is expected to be negatively impacted by higher investments in content, which will drive up programming and production costs at Media and Entertainment Distribution. Disney now expects to cut overall film and TV spending by $1 billion to $32 billion in fiscal 2022.
The Walt Disney Company Price and Consensus
The Walt Disney Company price-consensus-chart
|
The Walt Disney Company Quote
Shares of this Zacks Rank #3 (Hold) company have lost 38.5% year to date compared with the Zacks
Consumer Discretionary
sector’s decline of 34.6% on a year-to-date basis.
Nevertheless, Disney benefits from the growing popularity of Disney+ owing to a strong content portfolio and a cheaper bundle offering. Availability in the Nordics, Latin America and other Asian territories is helping it expand its user base.
Disney+ has emerged as a key growth driver for Disney, primarily driven by its solid content portfolio. Disney has an impressive line-up of big-budget movies slated to be released over the next couple of years, a number of which will appear on Disney+ simultaneously with their theatrical releases.
Disney recently began offering its streaming service, Disney+, in 16 countries across the Middle East and North Africa. Thanks to its robust content portfolio, the company remains on track to achieve its guidance of 230-260 million paid subscribers for Disney+ by the end of fiscal 2024. Expansion into the Middle East and North Africa will further help Disney in its cause.
Given the breadth of content of Disney+, the streaming platform is expected to grab the second spot in the region, with a subscriber base of 6.5 million in the region by 2027, trailing only Netflix, which is likely to have a viewer base of 11 million, per Digital TV Research data.
Netflix has been leveraging the talent of local producers in Asia lately, and some of its bets have turned into home runs, such as
The White Tiger
and
Crash Landing on You
. Netflix has renewed a raft of its Asian originals lately, including Korean hits like
Squid Game
, teen zombie horror
All Of Us Are Dead
, and
D.P
.
Apple’s streaming service, Apple TV+, continues to gain recognition with its critically acclaimed and popular shows like
Ted Lasso
. This year, Apple TV+ has earned 52 Emmy nominations, with the second season of
Ted Lasso
getting 20 nominations overall. Another show,
Severance
, has garnered 14 total nominations in its first season.
Disney like Netflix is expanding its Asian presence. The company recently announced a deal to bring a documentary series and a concert featuring the electrifying, mega-popular K-Pop band, BTS, to Disney+.
A Key Stock to Consider
Nexstar Media
NXST
with a Zacks Rank #2 (Buy) is a better-ranked stock in the same sector. You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here
.
Nexstar Media shares are up 12.5% on a year-over-year basis. The Zacks Consensus Estimate for second-quarter 2022 is pegged at $5.46 per share, unchanged over the past 30 days.
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