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Still from the series “The Mandalorian” on the Disney streaming service Disney +.
Disney
On Thursday, Disney’s four-hour investor day was a show of force.
Keeping people in front of screens for four hours to watch a trading day is absurd. The event had multiple intermissions!
But as Disney rolled out show after show for Disney +, methodically branding Marvel character after Marvel character, “Star Wars” spin-off after spin-off, Pixar movie after Pixar movie. most important 52) – I couldn’t help but think about how Disney is playing the video game in real time on a completely different level than its competition.
For almost every other company in the streaming wars, the goal is to acquire the most popular content to attract pay-month subscribers. That turns spending on content into an arms race, as companies like Netflix, AT & T’s WarnerMedia, Comcast’s NBCUniversal, ViacomCBS and Discovery hurl darts at series, producers, actors and ideas in the hopes of generating period hits.
But Disney’s strategy is different.
Disney is methodically building movies and showcasing its own intellectual property and then using successful characters to introduce new ones. He has turned actors into superheroes (Paul Rudd is Ant Man, Scarlett Johansson is Black Widow, Robert Downey Jr. is Iron Man, Mark Ruffalo is Hulk, etc.) and will use them repeatedly in feature films, Disney + series, and appearances in cameos. It advertised a dozen pieces of “Star Wars” content, reviving actors in old roles (Hayden Christenson as Darth Vader, Ewan McGregor as Obi-Wan Kenobi) and creating new stars.
Then Disney takes those movies and series and builds theme park rides based on them. Sell merchandise from them. Build a world of American culture from them.
This flyer is not new to Disney. But the sheer audacity was on display Thursday. Disney’s four-hour show was a ruthless and punishing display of IP-based content. It reminded me of when the US Dream Team Olympic basketball teams played against other countries and pulverized them into waves of talent.
Disney hasn’t even focused on ESPN + yet, which it predicts will have between 20 and 30 million subscribers by 2024, compared to a previous estimate of 8 to 12 million. That number doesn’t even take into account when ESPN may begin switching from highly-rated live sporting events to streaming from linear cable TV, assuming Disney continues to own the rights.
Inferior competition
Disney CEO Bob Iger deserves credit for designing Disney’s broadcast strategy around its powerful assets. WarnerMedia owns DC Comics and distributed the “Harry Potter” movies, but does not own theme parks. NBCUniversal has theme parks but has to license some of its most popular intellectual property (such as “Harry Potter”) because it does not own the intellectual property. ViacomCBS has “Star Trek” and “SpongeBob,” but so far it has differentiated its broadcasting ambitions around live NFL games and breaking news. Discovery just revealed its broadcast plans around unscripted television last week. Needless to say, you are not investing in HGTV and Food Channel movies and theme parks.
Disney’s main moment came near the end of the presentation, when it announced that it had increased its estimate of Disney + subscribers from 230 million to 260 million by 2024 from its previous estimate last year of 60 million to 90 million. That kind of increase is amazing.
Perhaps even more impressive, Disney’s streaming push has already achieved Wall Street’s goal of moving from traditional pay-TV to streaming – it has achieved a commercial multiple that surpasses Netflix. Disney’s Advance Price-to-Earnings Multiple is 65. Netflix’s Advance P / E is 56. For comparison, Viacom’s Advance P / E is 8.5 and Discovery’s is 9.2.
This is no small feat. Getting Wall Street to value a traditional media company like Netflix was purely theoretical just two years ago. Now Disney has done it. Its share price has doubled since March.
As Discovery CEO David Zaslav told CNBC last week, Disney has already won the streaming wars. Thursday’s Investor Day was a public victory lap.
Disclosure: Comcast’s NBCUniversal is the parent company of CNBC.
WATCH: Disney forecasts 230-260 million streaming subscribers by 2024
