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Disney's (DIS) Q4 Report on Deck as Disney+ Launch Nears

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Disney (DIS - Free Report) is set to report its fourth quarter results after the closing bell on Thursday, November 7. The media juggernaut has seen its shares rise just over 20% but has lagged behind the broader media conglomerate market’s 25% run in 2019. The company has been making headlines lately with the highly anticipated launch of its own streaming service Disney+.

The media giant’s arrival in the streaming service space is expected to intensify the competition within the streaming industry for the foreseeable future. Verizon’s (VZ - Free Report) partnership with Disney to bundle the streaming service as a complimentary service for its valued clients is a move that can potentially kickstart Disney+.

Verizon Partnership

Verizon will be offering free Disney+ for a year to all of its unlimited wireless data customers, as well as to new subscribers to its Fios Home and 5G Home Internet service. The partnership benefits both Disney and Verizon, as it allows for Disney to build a solid user base when its streaming service launches and provides an additional perk that can help Verizon retain its valued clients.

The bundle may also entice Verizon customers to upgrade to unlimited data plans which again helps Verizon grow its clientele network. Disney’s soon-to-be-competitor, Netflix (NFLX - Free Report) , orchestrated a similar partnership with T-Mobile (TMUS - Free Report) where select T-Mobile consumers get a complimentary Netflix subscription with their data plan.

Disney would have access to around 50 million subscribers who would have a free trial run with the new service. Netflix has around 60 million subscribers in the US, and while not all 50 million Verizon customers will likely sign up for the complimentary service, it can still build a strong foundation for the new service to build upon.

Disney+ Outlook

Disney+, which is thought to be Netflix’s boogeyman, will have to deal with the awkward reality of losing some of its programming to its main competitor. In an unforeseen turn of events, Disney will be losing some of its own content to Netflix as its anticipated launch nears.

Disney inked a deal with Netflix before the media conglomerate realized the extent of its own streaming ambitions which put it in the unfavorable situation. Disney isn’t revealing what exact titles will be surrendered to Netflix but according to CNET, at least one deal will move popular movies from 2016 through 2018 off Disney+ and back onto Netflix.

No matter what these titles might be, Disney+ subscribers can just download the desired content onto a device where it will remain for as long as the user is subscribed. The titles will also return to Disney+ once the contractual shift runs its course. To combat losing some of its beloved content, Disney is also investing in the development of original content for its streaming platform.

Our Q4 consensus estimates project Disney’s top-line to climb 32.99% to $19.03 billion and for earnings to fall 35.81% to $0.95 per share. Media network revenue is anticipated to slip 0.23% to $5.92 billion while studio entertainment soars 46.6% to $3.15 billion. Direct to consumer revenue is projected to reach $3.93 billion. Looking ahead to the company’s full fiscal figures, our estimates forecast a bottom-line drop of 18.93% to $5.74 per share and for net revenue to grow 16.7% to $69.36 billion.


Disney is preparing to enter the competitive but lucrative streaming space as it looks to consolidate its own TV and movie library through its new service. The media giant faces the harsh reality of losing some of its content to its biggest rival, but it may have a competitive advantage in terms of original content. Disney is a massive media conglomerate with enough resources to roll out substantial amounts of original content that can hold the service down while it waits to bring some of its beloved programing back from Netflix.

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