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Verizon (VZ) & Disney Movies Announce New Alliance

Zacks Equity Research

U.S. telecom behemoth – Verizon Communications Inc.’s VZ Fios by Verizon signed a premium-TV agreement with Walt Disney Co.’s DIS cloud-based digital movie service platform, Disney Movies Anywhere. This deal makes Fios by Verizon the first multichannel video programming distributor (MVPD) to join the cloud-based digital movie service platform of Walt Disney.

Verizon FiOS

Verizon FiOS (Fiber Optic Service) or FiOS by Verizon is a bundled Internet access, telephone and television service that operates over a fiber-optic communications network and reaches over 5 million people in nine states. It provides high speed Internet for all types of devices, TV channels and phones.
 
Disney Movies Anywhere (DMA)

Disney Movies Anywhere is a digital film platform for Disney, Pixar, Marvel, and Star Wars-branded films in the United States. It allows the storage of digital movie rights via purchases from providers such as iTunes, Google Play, Vudu, Microsoft, and Amazon.com.  The service allows consumers to redeem films produced by Walt Disney Pictures, Walt Disney Animation Studios, Pixar, Marvel Studios, Disneynature, and Lucasfilm, all owned by the Walt Disney Studios. The participating providers of Disney Movies Anywhere are iTunes, Amazon Video, VUDU, Google Play, Microsoft Movies & TV and now Fios by Verizon.

Benefits of the Deal

The tie-up will enable Fios by Verizon customers in the U.S. to seamlessly connect their digital movie collections across the Disney Movies Anywhere ecosystem. Fios customers can access their favorite Disney, Pixar, Marvel and Star Wars movies at home or anywhere else. They can also add the free DMA app or channel to their devices including Apple Inc.'s AAPL iPhone, iPad, iPod Touch, Android mobile phones and tablets , Android TV, Amazon.com Inc. AMZN’s Fire tablets, Fire TV and Fire TV Stick, Roku, and Xbox 360. Per the deal, Fios subscribers can even purchase Disney movies — including new releases like The Jungle Book  — and access them and other digital titles via the DMA ecosystem.

As an add-on, Disney Movies Anywhere is also offering a free digital copy of Disney Pixar’s Monsters, Inc. to new and existing members who connect to the service, though for a limited time-period. This promotional offer is valid till Sep 7, 2016.

The Bottom Line

This partnership is expected to benefit both the companies. On the one hand, Verizon deems Disney Movies Anywhere to be a perfect fit for families as Fios by Verizon subscribers can now enjoy home entertainment with easy access to family-friendly content. On the other hand, Disney Movies Anywhere says that this deal is a crucial addition to its business and will help it in expanding access to its digital movie collections across multiple platforms and devices.

Both Verizon and Walt Disney currently have a Zacks Rank #3 (Hold).

VERIZON COMM Price

 

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DISNEY WALT Price

 

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