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Disney+ is surging — here are 3 major winners

Brian Sozzi
·Editor-at-Large
·3 min read
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Disney+ is seeing subscriptions surge as the media giant feeds the platform even more original content, and outlines plans to continue to do so in coming years.

And that seemingly endless wheel of new content could fill the cash coffers of major toymakers Hasbro, Mattel and Jakks Pacific that license Disney content. These kings of the toy aisles are poised to introduce more new toys based on the unique content slate out of Disney+. In effect, it potentially turns their respective businesses into year-round financial juggernauts as opposed to being overly reliant on holiday season demand or a big movie release.

“Licensees are direct beneficiaries of higher content spend, with more opportunities to merchandise around emerging and beloved properties. On-demand access, anywhere and anytime, also elongates historically tight selling cycles, creating year-round opportunities to sell and multi-year performance potential even in years without major theatrical events,” said Jefferies analyst Stephanie Wissink in a new note.

Wissink added, “We think this is especially true for fan-based brands such as Star Wars and Marvel. We also expect the globalization of Disney's streaming platforms to contribute to a more robust international consumer goods opportunity for license partners. In many markets, where Disney's only presence will be digital, we expect demand for consumer products to follow, especially for marquee properties such as Star Wars, Marvel, Disney Princess, and Pixar.

The analyst is particularly bullish on Jakks Pacific seeing as it relies on Disney licenses to drive 40% to 45% of its sales (see chart below). Wissink lifted her price target on Jakks to $8 from $5 ahead of the company’s earnings release next week.

Jakks shares currently trade at $8.57.

The surge in Disney+ continues, and could benefit major toymakers.
The surge in Disney+ continues, and could benefit major toymakers.

Executives at these toymakers have to be licking their chops after the quarter out of Disney+ shared on Thursday evening.

Subscribers to Disney+ surged even more than expected to 94.9 million, or well ahead of the 90.2 million anticipated. On a call with analysts, Disney executives discussed several new pieces of original content coming soon to Disney+: a Boba Fett spinoff series from “The Mandalorian”; a “Black Panther” series; and “Raya and the Last Dragon.”

Recall back at Disney’s December 2020 investor day, it outlined plans to invest $14 billion to $16 billion in content with a main focal point being Disney+. The company at the time reiterated a commitment to releasing 100 new pieces of content each year.

“Hasbro’s commercial and brand teams are executing meaningful global merchandise programs for streaming properties and supporting significant future partner brand initiatives, including with Disney+ for Star Wars, Marvel and Disney Princess and Frozen as well as Hasbro-led streaming initiatives for our portfolio from children through adults,” Hasbro Chairman and CEO Brian Goldner told analysts this week on an earnings call.

Goldner continued, “We will be taking advantage of in partnership with all the work Disney has done to put certain content on the streaming platform and Disney+.”

Yahoo Finance’s Emily McCormick contributed to this story.

Brian Sozzi is an editor-at-large and anchor at Yahoo Finance. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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