Walt Disney revealed the details of its much-anticipated Disney+ streaming service at its investor day. Disney disclosed that its plans to spend $2 billion on the content of its much-anticipated Disney+ streaming service next year out of which about $500 million will be in cash.
It is evident from the modest subscription of only $6.99 per month that Disney is looking at scaling its services at an accelerated pace. The company expects to reach 60 million to 90 million subscribers by the end of fiscal 2024, with Hulu and ESPN+ following close behind.
The company plans to buy back streaming rights from Netflix, especially its films and kids series. Even though foregone licensing revenue will result in a $150 million decrease in operating income this year, the company will be soon able to recuperate the losses as more of its content comes off Netflix.
The company also has the advantage of adjusting some of its ledgers to show a credit for the movie studios and media networks. This means that its estimate of paying around $1.5 million to $2 billion in licensing fees next year need to not be in cash. This ability to license content from itself gives it a far greater advantage over other streaming services like Netflix. With reduced pressure on cash flow, it is expected that Disney would be able to cover its marketing and licensing costs much sooner than 2024.
Overall, it looks like Disney+ will be breaking even if not profitable by 2024, despite about $4.5 billion in content expenses.
The Aroon Indicator for DIS entered a downward trend on August 19, 2024. Tickeron's A.I.dvisor identified a pattern where the AroonDown red line was above 70 while the AroonUp green line was below 30 for three straight days. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options. A.I.dvisor looked at 206 similar instances where the Aroon Indicator formed such a pattern. In of the 206 cases the stock moved lower. This puts the odds of a downward move at .
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
an operator of amusement parks, hotels, television stations and radio broadcasting stations
Industry MoviesEntertainment