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Disney (DIS) Creates International Content Hub, Boosts DTC Unit

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The Walt Disney Company (DIS - Free Report) is creating a new hub for international content creation to boost the expanding pipeline of local and regional content for its streaming services.

The extension plan would support the worldwide expansion of the company’s direct-to-consumer (DTC) business.

As part of the process, Disney has made several changes to its key executive appointments to the Disney Media & Entertainment Distribution (DMED) segment.

Rebecca Campbell will lead Disney’s new International Content group, overseeing regional and local content production and reporting directly to Disney CEO Bob Chapek.

Campbell was previously chairman, International Operations & Direct-to-Consumer, part of Disney Media & Entertainment Distribution (DMED). She will continue to lead Disney’s international operations.

Michael Pull has been promoted to the newly-created role of overseeing Disney+, ESPN+, Star+ and Hulu and will report directly to Disne y Chairman Kareem Daniel.

Joe Early has been appointed as the president of Hulu. He was previously the vice president of the Marketing and Operations department for Disney+.


Strong Content to Aid Subscriber Growth

Disney has been taking care of consumers’ preferences and stakeholders’ expectations of the brand, by creating more inclusive regional and local content. The robust content portfolio has been a key catalyst in its subscriber growth.

The company recently revealed that it would increase its total content budget by $8 billion year over year, reaching $33 billion in 2022. The decision was based on the intention to support its DTC services, which include Hulu, Disney+ and ESPN+.

Disney is significantly investing in creating original local and regional content for its streaming services. More than 340 titles are already in various stages of production and development.

Disney+ added 179 million total subscriptions across its DTC portfolio at the end of fiscal 2021, up 60% year over year.

Hulu and ESPN+ had 43.8 million and 17.1 million paid subscribers, respectively, at the end of fourth-quarter fiscal 2021.

Focus on DTC Business Expansion

Disney is focused on the global expansion of its DTC business. In line with its goal, the company has been riding on its expanding partner base to reach more consumers worldwide.

Disney launched Disney+ in 2019, and since then, its streaming business has expanded rapidly. The service offers nearly 700 movies and 11,700 episodes of television shows from brands such as Disney, Pixar, Marvel, Star Wars, National Geographic and Disney+ originals. Disney+ has plans of expanding to more than 160 countries by fiscal 2023.

On Aug 31, 2021, Disney launched Star+, its stand-alone general entertainment and sports streaming service in Latin America. Disney launched Disney+ Hotstar in Malaysia on Jun 1, 2021, in Thailand on Jun 30, 2021, in Indonesia on Sep 5, 2020, and in India in April 2020.

Recently, Disney signed a deal with Cox Communications.

Per the agreement, Disney+ will be available to customers on Cox’s Contour TV and Contour Stream Player.

In November 2021, Disney renewed its content carriage agreement with Comcast (CMCSA - Free Report)

Per the agreement, Comcast will continue to distribute Disney’s cable channels, such as the Disney branded channels, the ESPN networks, the FX Networks and the National Geographic channels Xfinity X1 and Xfinity Flex.

Earlier in 2021, Comcast launched Disney+ and ESPN+ on Xfinity X1 and Xfinity Flex.

Disney renewed its distribution agreement with Alphabet (GOOGL - Free Report) division Google’s YouTube TV, after its previous agreement expired on Dec 17, followed by a two-day blackout.

Per the renewal of the agreement, Disney and Alphabet's Google reached a deal to restore ABC, ESPN and other Disney channels to YouTube TV.

Zacks Rank and A Stock to Consider

Currently, Disney holds a Zacks Rank #3 (Hold).

The Zacks Consensus Estimate for Disney’s fiscal 2022 earnings have moved southward by a penny in the past 30 days to $ 4.20 per share.

Shares of DIS have declined 13.5% in the past year against the Zacks Media Conglomerates industry’s plunge of 41.7% and the Consumer Discretionary sector’s fall of 17.3% in the past year.

A better-ranked stock to consider from the Zacks Consumer Discretionary sector is Funko (FNKO - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Funko’s shares have increased 48.3% in the past year against the Zacks Consumer Products - Discretionary industry’s decline of 53.3% and the Consumer Discretionary sector’s fall of 17.3% in the past year.

The Zacks Consensus Estimate for Funko’s 2022 earnings is pegged at $1.38 per share, which has remained steady in the past 60 days.