We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Disney Looks to Attract Users with Low Cost Disney+ & Hulu
Read MoreHide Full Article
Disney (DIS - Free Report) is betting big on the streaming services market. The company has the capacity and resources to create a niche for itself owing to its popular franchises and brand value.
Disney’s upcoming streaming service, Disney+, is likely to cost lower than Netflix (NFLX - Free Report) , which recently hiked its subscription prices in the range of 13% to 18% for U.S. customers.
Moreover, Hulu recently cut the price of its basic ad-supported plan by $2 to $5.99/month, making it the most affordable streaming service in the U.S. market. However, Hulu hiked the price of its live TV offering by $5 to $44.99/month while its ad-free version remains unchanged at $11.99/month.
Notably, Disney, which currently holds 30% stake in Hulu, is entitled to another 30% stake after acquiring Fox. Comcast (CMCSA - Free Report) owns 30% stake in Hulu and AT & T the remaining 10%.
Hulu’s Initiatives and Disney+ Launch to Boost User Base
Hulu’s price cut of its most popular plan is expected to attract users. The last price cut in 2010 increased its user base and retention rates, per The Wall Street Journal. Notably, Hulu added 8 million U.S. subscribers in 2018, up 48% year over year, bringing the total count to 25 million.
Moreover, expanding user base may help Hulu grow its ad revenues, which surged 45% year over year to $1.5 billion in 2018. Further, Disney’s CEO Bob Iger has plans to take the service global and add more international licensed content after completing Twenty-First Century Fox acquisition. Notably, 89% of Hulu subscribers first watched licensed programming before watching original content, per 7Park Data.
Disney’s upcoming streaming service, Disney+, will leverage the company’s existing IP along with investments in original content. Moreover, the company’s acquisition of Twenty-First Century Fox will further strengthen its film and TV slate.
Free Service Providers Giving a Tough Time
Disney is investing heavily due to the competitive nature of the streaming market, despite losing more than $1 billion from its streaming segments in 2018. Moreover, the company will face competition not only from dominant player like Netflix but also from free streaming services.
Recently Amazon and Sinclair Broadcast (SBGI - Free Report) launched a free streaming service. Additionally, Viacom will enter the free streaming space after it completes the acquisition of Pluto TV. Comcast announced the launch of a free service in early 2020. The free services may easily attract users from existing players and are likely to threaten Disney’s user base growth.
Nevertheless, Disney’s worldwide popular franchises along with its investments may help the company’s direct-to-consumer (DTC) services flourish even in this highly competitive market.
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Disney Looks to Attract Users with Low Cost Disney+ & Hulu
Disney (DIS - Free Report) is betting big on the streaming services market. The company has the capacity and resources to create a niche for itself owing to its popular franchises and brand value.
Disney’s upcoming streaming service, Disney+, is likely to cost lower than Netflix (NFLX - Free Report) , which recently hiked its subscription prices in the range of 13% to 18% for U.S. customers.
Moreover, Hulu recently cut the price of its basic ad-supported plan by $2 to $5.99/month, making it the most affordable streaming service in the U.S. market. However, Hulu hiked the price of its live TV offering by $5 to $44.99/month while its ad-free version remains unchanged at $11.99/month.
Notably, Disney, which currently holds 30% stake in Hulu, is entitled to another 30% stake after acquiring Fox. Comcast (CMCSA - Free Report) owns 30% stake in Hulu and AT & T the remaining 10%.
The Walt Disney Company Revenue (TTM)
The Walt Disney Company Revenue (TTM) | The Walt Disney Company Quote
Hulu’s Initiatives and Disney+ Launch to Boost User Base
Hulu’s price cut of its most popular plan is expected to attract users. The last price cut in 2010 increased its user base and retention rates, per The Wall Street Journal. Notably, Hulu added 8 million U.S. subscribers in 2018, up 48% year over year, bringing the total count to 25 million.
Moreover, expanding user base may help Hulu grow its ad revenues, which surged 45% year over year to $1.5 billion in 2018. Further, Disney’s CEO Bob Iger has plans to take the service global and add more international licensed content after completing Twenty-First Century Fox acquisition. Notably, 89% of Hulu subscribers first watched licensed programming before watching original content, per 7Park Data.
Disney’s upcoming streaming service, Disney+, will leverage the company’s existing IP along with investments in original content. Moreover, the company’s acquisition of Twenty-First Century Fox will further strengthen its film and TV slate.
Free Service Providers Giving a Tough Time
Disney is investing heavily due to the competitive nature of the streaming market, despite losing more than $1 billion from its streaming segments in 2018. Moreover, the company will face competition not only from dominant player like Netflix but also from free streaming services.
Recently Amazon and Sinclair Broadcast (SBGI - Free Report) launched a free streaming service. Additionally, Viacom will enter the free streaming space after it completes the acquisition of Pluto TV. Comcast announced the launch of a free service in early 2020. The free services may easily attract users from existing players and are likely to threaten Disney’s user base growth.
Nevertheless, Disney’s worldwide popular franchises along with its investments may help the company’s direct-to-consumer (DTC) services flourish even in this highly competitive market.
Disney currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>