Welcome back to Cheddar News is closing bell time now
for our stock of the day and today we're looking
at Disney as the media empire looks to turn around
what's been a disastrous 2022 so far Now, Disney
stock has had a dismal performance in the first half
of the year. It's down about 35% a year
to date, following disappointing second quarter earnings inflation concerns
and the fact that its flagship streaming service, Disney
Plus Has failed to turn a profit. Now.
Disney's direct consumer segment, which includes Disney Plus,
that lost about$900 million$290 million 2021, Disney
has spent tens of billions of dollars producing high profile
original content, including series like the Mandalorian, Obi
wan Kenobi and the upcoming ANDAR. But now investors
and analysts are worried that growth could be slowing for
Disney Plus. Take a look at the number of
subscribers for Disney Plus, they're up to almost 138
million as of last quarter. And while Disney Plus
has added more than 100 million subscribers in two years
, the rate of growth isn't happening as quickly as
Disney would hope Ceo bob traffic is under pressure to
keep growing and he set an ambitious goal for that
saying the company has a target of between 232 160
million subscribers by september 2024. That's possibly more ambitious
of his goal of making Disney Plus profitable by that
same time. That goal has been described as unrealistic
by some investors. What do you think about this
? You know, this is a really good question
. Um, Disney Plus was fast out of the
gate. I did applaud their strategy of doing more
quality content than just um, and fewer shows than
just flooding the market with a lot of programming.
But those shows cost a lot of money and they're
not simple. If you think about their blockbusters,
they were kind of hoping that they would pull in
some of the marvel movies to put on the service
. You know that Disney Plus is getting its first
r rated movies with Deadpool and during the service as
well. So they thought they'd have a library of
content to really include as well as the new original
shows. But things have been slowed down by the
pandemic. Things are being released a little slower than
usual. They even did that tier where you had
to pay a little extra to watch the movie same
day on the platform as in theater. So it's
a little bit shaky for them. And there's just
so many more competitors in the market. Um,
everyone's talking about competition these days and it's pretty fierce
, even though the company like Disney has such household
recognition. You have Disney Plus, I do have
Disney Plus and I, you and I have talked
about this before, There are two streamers that I'm
not willing to get rid of and that is Disney
Plus and HBO max. I think the content that
they keep putting out, it's not just quantity here
, it really is quality shows. I mean even
if you're not a Star Wars fan or a marvel
fan they're made so well, it's so character driven
, the stories are told so well, I think
Disney is doing a really good job with the content
. I do think it will continue to grow.
What do you think? Um they are going to
add an ad supported tier next year? And I
think like netflix are kind of hoping that if they
come in even a lower price point families are gonna
want to stay watching. Um they've had some success
with the Hulu model which is actually growing pretty rapidly
. But again, um Disney Plus wasn't that expensive
to begin with, it's not one of the more
expensive ones in the market. HBO was much more
expensive. Netflix is also one of the most expensive
on the market. I don't know how much cheaper
they could make it to get people to watch and
stay subscribed, especially cause families, I think it
rates pretty high on the list, especially if you
have younger kids. Absolutely. And we're now seeing
Disney trying to expand its streaming user base with some
big changes for the first time. Disney like Michelle
just mentioned is adding R rated movies to its streaming
service, Popular films like Deadpool, Deadpool two and
Logan becoming the first adult flicks to land on Disney
Plus the additions come as Disney works to emphasize entertainment
for adults on its platform in the hopes of making
the service more well rounded. The films launched on
the streaming service this past friday, Disney Plus has
settings in place to screen adult content from younger audiences
. Meanwhile, growing interest in hulu also helping Disney
consumers have the option of bundling their hulu. Disney
Plus and ESPN plus subscription For a monthly fee of
$14, which helps save money for Americans with a
tight budget, it's about half the price of buying
the subscriptions individually. Disney is actively trying to increase
its revenue by getting into ad supported streaming Disney Plus
, users will see ads beginning in late 2022.
Disney's other key sectors is its parks division, which
is also seeing some big changes this week on Wednesday
florida's, Disney world will unveil an updated bracelets for
guests called Magic Band Plus now this wristband can do
even more from connecting to your smartphone to unlocking your
hotel room. Of course on Disney resorts, the
bracelets will light up at night. They will let
you interact with key areas of the park, which
even includes a scavenger hunt for the park's 50th anniversary
, Despite the down year for Disney Stock, it's
actually in the green over the last month, you
see it's up 6.2% right now. We'll get a
better sense of how the company is doing when it
reports third quarter earnings in about three weeks.