Last week, we highlighted how Disney’s move to accelerate direct-to-consumer streaming would hasten the demise of the already struggling multichannel video ecosystem (link). While Disney has certainly enjoyed tremendous success with the launch of Disney+ last November, there are two key questions at hand: (1) How do they maintain their momentum in DTC? (2) Do they have the optimal strategy in having siloed content into multiple streaming offerings instead of focusing all of their programming on one service? Thanks to … Continue reading Hamilton Illustrates the Opportunity and Challenges Facing Disney+
Disney’s Fiscal Q3 (June) 2020 earnings call earlier this week marked an important inflection point for the media industry as a whole: “the incredible success we’ve achieved to date has made us even more confident about the future of our direct-to-consumer business and our ability to be more aggressive in our approach. Going forward, this confidence, coupled with the trends we’re seeing in the multichannel universe will lead us to pursue even more innovative and bold initiatives to grow the … Continue reading Disney Launches Three Torpedoes That Will Accelerate Legacy Media’s Collapse
Disney is set to report fiscal (June) Q3 2020 earnings after the close tonight. Earnings are expected to be awful, with virtually every part of Disney severely impacted by the COVID-19 pandemic except for Disney+/Hulu, which have been notable beneficiaries. What will be far more important to investors is how management discusses their plans to deal with the unprecedented challenges facing Disney over the coming year(s). We have been surprised that investors are willing to look through the ongoing pandemic … Continue reading Nine Questions for Disney’s Q3 2020 Earnings Interview Tonight
Last Friday, just as the US government appeared to be closing in on making a decision to ban TikTok, we learned of Microsoft’s interest in an acquisition. However, it remains unclear whether the Trump administration will allow a sale to a US company. On Sunday afternoon, Microsoft issued a formal statement making their acquisition interest public (link). While it may be weeks until we know what ultimately happens to TikTok, to us the most important takeaway is that legacy media … Continue reading TikTok/Microsoft: What it Means for Stocks & Yet Another Legacy Media Miss
With broadband access even more of an essential service in a remote work/school world, Comcast’s cable business was unsurprisingly solid. The most noteworthy thing about this quarter’s call was what did not get addressed or asked: no question about the threat of Title II regulation coming back if Vice President Biden defeats President Trump in November (even if we remain skeptical that reclassification will meaningfully alter the broadband story). Beyond that, the most interesting aspects of Comcast’s Q2 2020 results … Continue reading Eight Key Media Industry Takeaways from Comcast’s Q2 2020 Results
Since the collapse of WWE stock last year, we have been waiting for the right entry point. In June, we considered that now may be the time. From a financial standpoint, the company has dealt well with the pandemic, managing costs down while fulfilling contractual content obligations. Street estimates appeared too low for 2020 (albeit mostly because of those cost savings). In addition, we saw some stabilization in Raw and SmackDown ratings in June and wondered if we could be … Continue reading WWE Media Rights Will Decline Unless Ratings Improve – Initiating Neutral
We are raising our ATVI price target to $92, as we believe the company could notably exceed earnings expectations in the second half of 2020 with continued Call of Duty strength (even as we are not far above Q2 consensus). While the exact timing of key Blizzard releases remains up in the air, we have growing confidence in the company’s turnaround reaching all of its core franchises and believe investors are also overlooking the stealthy power of the company’s existing … Continue reading Investors Still Underestimating Significance of Revamped COD Franchise – Raising ATVI Price Target to $92
We were surprised to see ink spilled by our peers about the relatively tame promotion that T-Mobile announced on Wednesday. To be fair, the reaction was less dramatic than some of the notes that followed Sprint’s dud promotion of a Free Year of Service. That was fun. Nevertheless, we felt compelled to address this week’s news with a brief note that lays out some facts about T-Mobile’s latest rate plan, how it stacks up to the competition, and what might … Continue reading What Big Price Cut?
T-Mobile’s low-band download speeds have dropped notably since it stopped using Dish’s 600 MHz spectrum in late June, based on updated data from Opensignal. We discuss why 600 MHz spectrum is an important bridge for T-Mobile in the #RaceTo5G, while it methodically deploys the 2.5 GHz spectrum that we expect to ultimately deliver market differentiation. We also update our view on why and when we think a spectrum lease will be announced between T-Mobile and Dish. Adding spectrum increases download … Continue reading T-Mobile Speeds Drop Without Dish Spectrum
HBO Max launched on May 27th with more of a whisper than a roar, despite being the central focus of WarnerMedia’s long-term strategy. Max has not yet had meaningful new, original content to generate consumer buzz. At the same time it has a distribution issue – engaged in the first high profile affiliate fee 2.0 battle with both Roku and Amazon’s FireTV. Given the strategic importance of HBO Max and the precedent it will set as it jockeys for position … Continue reading Is Tenet Direct-to-HBO Max the Battering Ram WarnerMedia Needs vs. Amazon/Roku?