|Day's Range||0.0100 - 0.0300|
Byron Allen is an Equity and Content Partner in the RSN Holding Company BALTIMORE and BURBANK, Calif. , Aug. 23, 2019 /PRNewswire/ -- Sinclair Broadcast Group, Inc. (Nasdaq: SBGI) ("Sinclair" ...
The long-awaited opening of the NBA Experience in Disney Springs means yet another entertainment attraction inside the sprawling Disney resort property in Florida.
The Walt Disney Co.’s D23 Expo 2019 has started off with a splash of new information for Orlando. The Burbank, California-based theme park giant (NYSE: DIS) offered a peek behind the curtain at what it has planned for Walt Disney World's Epcot. The theme park already was slated to get upgrades over the next several years, including rides themed after Marvel’s Guardians of the Galaxy and Pixar’s Ratatouille, as well as several aesthetic upgrades.
(Bloomberg Opinion) -- At first glance, Entertainment One Ltd. and Hasbro Inc. make for ideal bedfellows. The former makes kids TV hit Peppa Pig, the latter is the world’s biggest toymaker. Merge one with the other and you get a combined video and merchandising giant.That’s why there’s sound strategic rationale for Hasbro’s planned 3.3 billion-pound ($4 billion) acquisition of the Toronto-based studio. It gets its trotters on some valuable kids’ franchises that it can turn into more toys, and it can use eOne’s TV and film production chops to exploit its own catalog of games, which span from Monopoly to Buckaroo! to Jenga.Hasbro has a decent if not stellar track record of turning its game franchises into films. The Transformers and G.I. Joe movies have done well at the box office, though no one would accuse them of being critical successes.That’s where reservations about the eOne deal come in. While it might be known as the firm behind Peppa Pig, the cartoon represents just 10% of its total revenue. The company’s family and brands business is expanding quickly, but its film and television division, which has made films such as Green Book and TV shows including The Walking Dead, contributes more sales and profit. It has something that Hasbro lacks: prestige.Darren Throop, the eOne chief executive, prides himself on the quality of the film and TV productions. It’s easy to see how eOne stalwarts might find the prospect of churning out spinoffs from Hasbro’s board games and toys hard to stomach. Sure, the deal logic holds up on paper: 130 million pounds of anticipated synergies by 2022 could lead to returns from the deal nearing 8% based on analyst earnings forecasts, just about covering the cost of capital. And that's before any upside from selling more toys or making more films.But are these firms as good a cultural fit as they insist? That might be the biggest hurdle to realizing the deal’s potential. That’s assuming it even completes. Right now, that’s in doubt. The stock traded as high as 5.90 pounds on Friday, above Hasbro’s 5.60 pounds-per-share bid, suggesting investors anticipate either an activist pushing the purchase price higher, or a counterbidder sticking their snout in. Rivals might include the Walt Disney Co., John Malone’s Liberty Global Plc, Vincent Bollore’s Vivendi SA, Comcast Corp. or even toymaking rival Mattel Inc.The plethora of competing TV and film streaming services has sparked a fight for high-quality content, and eOne has some of the best, helped by relationships with Steven Spielberg, with whom it has a production joint venture, and super-producer Mark Gordon.Disney expanded from a production company into a merchandising and theme park giant, and its success under CEO Bob Iger has been built around recognizable franchises such as Star Wars, Marvel and Pixar’s output. Hasbro is making a play to do the same but in the opposite direction. High-quality content is increasingly scarce and expensive, though. That might make eOne an equally tasty morsel for someone else.To contact the author of this story: Alex Webb at firstname.lastname@example.orgTo contact the editor responsible for this story: James Boxell at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Wake Forest University's new production studio facility for athletic telecasts on the ACC Network (NYSE: DIS) is hidden away at one of the athletic department's major playing venues. The tiny plate outside the former visitors' clubhouse off the right-field line at David F. Couch Ballpark is the only indication that a television studio facility – not a locker room with showers – is on the other side of the concrete blocks. For the launching of the ACC Network, which debuted Thursday, Wake Forest built the 3,100-square-foot studio facility in the former baseball clubhouse to coordinate and produce telecasts of all Demon Deacon sports for the new network.
The fight to lead internet streaming services is getting tighter, with Netflix and Hulu leading the pack, while Apple TV offers viewers a set-top box.
Netflix is still far and away the most dominant player in the streaming industry. But the streaming platform is slipping in U.S. market share to rivals Amazon and Hulu.
Atom Tickets wants to help movie marketers figure out what works and what doesn’t when it comes to advertising. The social movie ticketing platform has partnered with global ad-tech company The Trade Desk (NASDAQ: TTD) to help identify sales generated from programmatic ads for movies. The companies say this ability is “a first for the industry.” “Studio marketers are always looking for smart new ways to connect their budget to ticket sales, and this exclusive solution for the programmatic part of their media-mix delivers just that," said Matthew Bakal, co-founder and chairman of Atom Tickets in a statement.
From a broader view, it's hard not to love Netflix (NASDAQ:NFLX). Starting life originally as a DVD subscription service, the company transitioned to the streaming platform. Since then, it has never looked back, enjoying its first-to-market advantage. Later developments, such as the production of original content, made Netflix stock all the more compelling.Source: Riccosta / Shutterstock.com But recently, this thesis is under severe threat. Last month, Netflix released its second quarter of 2019 earnings report. To say that it was a disappointment would be a grave understatement. While I'm not going to rehash old news, the key metric to focus on is the subscriber count. In the U.S. market, Netflix lost 100,000 subscribers when analysts expected it to gain 300,000. Unsurprisingly, NFLX stock tanked.Further, global net ads measured 2.7 million. This tally was substantially below analyst forecasts for five million. No matter how you break it down, Netflix stock lives on subscriber trends. That it fell short so spectacularly hurt sentiment.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut that's not all. Over the past several months, tech firms and traditional media companies have encroached into Netflix's arena, disrupting the disruptor. Most notably, Disney (NYSE:DIS) will launch its streaming service Disney+ this coming November. That's a double whammy for NFLX stock due to a loss of content and the addition of a rival. * 10 Marijuana Stocks to Ride High on the Farm Bill Furthermore, Disney will offer a bundled plan which encompasses Disney+, ESPN+, and ad-supported Hulu for $13. That's the same price as Netflix's "Standard" Plan.Beyond the Magic Kingdom, names like Comcast (NASDAQ:CMCSA) and Amazon (NASDAQ:AMZN) are aggressively ramping up their streaming inroads. Plus, NFLX is losing the popular show Friends to AT&T's (NYSE:T) WarnerMedia.Is it time to dump Netflix stock? Recession Worries Hits Netflix Stock HardOutside recession fears, I'm inclined to believe that the current fallout in NFLX stock is temporary. And by temporary, I would mean that it's a discounted buying opportunity.But in the past weeks, any optimism toward the U.S.-China trade war has evaporated. Additionally, the yield for 2-year Treasuries again moved above the 10-year yield. This inversion of the yield curve potentially signals a recession, yet the Federal Reserve is not acting decisively.While I don't want to get too wonky, these signs indicate that a recession is more likely than not. As an investment levered to consumer sentiment, this is a bad omen for Netflix stock.Now, the typical retort to this bearish assessment is that even in a downturn, people need entertainment. This is one of the reasons why I think AMC Entertainment (NYSE:AMC) makes a viable contrarian case. Certainly, compared to traditional TV subscriptions, Netflix is dirt cheap. And people will give up almost anything before they give up their internet, which is a digitalized society's lifeblood.Unfortunately, the robust streaming competition presents a new kink to this logic. In a bullish economy, consumers would probably buy two or even three streaming services. Even at $39, for example, this is much cheaper than traditional TV providers' post-introductory subscription specials.But in a recession? That's when consumers will start belt-tightening. They probably won't get rid of streaming altogether. However, they may not unnecessarily bundle competing services. Thus, it becomes a race to see who can offer the best content at the best price.Naturally, this makes stakeholders of Netflix stock nervous, especially after the disastrous Q2 report. Seemingly, subscribers are getting tired of the company's original content. And streaming is known for fickle viewers. The Risky Case for NFLX StockIf push comes to shove, though, I'd gamble that Netflix will rise above the streaming fray. Why? It goes back to original content.Currently, millennials represent the biggest demographic in the U.S. workforce. That probably won't change in a recession. Therefore, the people who are most savvy to streaming content are also the ones earning a paycheck.Ultimately, this benefits Netflix stock because the streaming giant has truly captured the millennial's attention span. When people watch various shows and programs, they're mostly doing so through Netflix.Additionally, NFLX features a wide range of gritty and compelling drama, stuff that millennial subscribers go wild over. And let's not forget that the company has the Midas touch in terms of producing relevant, award-winning content.Of course, I'm not completely crazy. This is still a risky proposition given the Q2 results. But it's not entirely out of the question that Netflix stock can ride out a downturn. Thus, if you want to take a measured gamble, I don't think it's a bad idea.As of this writing, Josh Enomoto is long T and AMC. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Hereas Why Netflix Stock Might Win in the Recession appeared first on InvestorPlace.
This introduction of thousands of people will attract new residents and businesses to the area as construction stretches on into the decade ahead.
Disney (NYSE:DIS) stock has an extremely strong global entertainment brand and exciting growth prospects in streaming media. The House of Mouse has shown robust performance in 2019, and year-to-date, DIS stock is up about 24%.Source: ilikeyellow / Shutterstock.com However, August has not been a good month for Disney shareholders so far. And there will likely be further volatility and some profit-taking in the coming weeks. Therefore investors may want to consider waiting on the sidelines if they do not currently have any positions open in Disney stock.Alternatively, if they already own Disney, investors may either consider taking some money off the table or hedging their positions. As for hedging strategies, covered calls or put spreads with Sep. 20 or Oct. 18 expiry could be appropriate. Any short-term decline in DIS stock may offer a better entry point for long-term investors.InvestorPlace - Stock Market News, Stock Advice & Trading Tips Disney Stock's Q3 EarningsOn Aug. 6, Disney stock reported earnings for the third quarter of fiscal 2019. It logged revenues of $20.25 billion on earnings per share of $1.25. However, DIS stock missed on both revenue and net income. * The 10 Best Marijuana Stocks to Buy Now Disney blamed the Q3 earnings miss on the current integration of Fox Corporation's entertainment assets, which it had acquired earlier in the year for $71 billion.Four segments contribute to Disney's revenue: * Media Networks (such as ABC and ESPN; about 33% of revenue) * Parks, Experiences and Products (such as Disneyland and cruise lines; about 30% of revenue) * Studio Entertainment (including Lucasfilm and Marvel; about 19% of revenue) * Direct-to-Consumer & International (including streaming services and advertising; about 18% of revenue)Results from Disney's operating segments varied. Media Networks unit reported revenue of $6.7 billion, showing a 21% year-over-year increase.Parks, Experiences and Products's revenue came at $6.6 billion during the quarter, with a 7% rise from Q3 2018. Nonetheless, analysts were concerned that there was lower attendance at Disney parks overall.Studio Entertainment segment reported revenue of $3.8 billion, a 33% increase from the same period one year ago. But this isn't a surprise. Most of our readers will be familiar with the fact that a number of Disney's movies have done extremely well in 2019.Direct-to-Consumer & International segment saw revenue of $3.86 billion during the quarter. However, its operating losses increased to $553 million from $168 million. The company blamed the losses on increased investments in ESPN+, Disney+ and Hulu streaming services.In August, Wall Street wanted to see whether the group's diversified revenue streams would remain robust for the second half of 2019. However, the quarterly report raised eyebrows and the stock price since then has been reflecting investors' worries. Content Development Will Be Expensive for DIS StockDisney's third-quarter results highlighted an important headwind that the company is facing in the rest of the year, i.e., increased costs.During the conference call, Disney management said that direct-to-consumer losses are likely to rise to $900 million in the fiscal Q4. The group will continues to invest in content for Disney+ as well as ESPN+ and Hulu.Disney+ will launch in November and feature content from various sources, including Disney, Pixar, Marvel, Star Wars. In the U.S., the service, which is likely to appeal to a wide range of viewers, will cost $6.99 a month or $69.99 a year. And the global launch of Disney+ will start in early 2020.Disney will offer U.S. consumers a bundle of Disney+, ESPN+ and an ad-supported Hulu subscription for $12.99 per month. Incidentally, that would be the same cost as Netflix's (NASDAQ:NFLX) standard subscription plan.Hulu will have have mostly adult content as opposed to Disney+, which will focus on kids and will not feature any R-rated movies. The bundle will launch alongside Disney+ on Nov 12. CEO Bob Iger said that Disney+ is not likely to have as much content as Netflix, which may become an important concern for investors, especially in the short run.All of these exciting developments in the streaming space have begun to cost Disney real money. Disney management has to ensure that the technical backbone of the streaming services works well. It also has to create content to keep the subscribers happy.Another way to think about the cost of producing original content is that until now, Disney was making money selling content to Netflix. Now it may have to spend serious cash every year to develop content. Of course, the list of competitors for DIS stock includes Amazon (NASDAQ:AMZN), Apple (NASDAQ:AAPL), and AT&T (NYSE:T), too.Many analysts are also wondering if the streaming space needs this many services. Could there also be a price war around the corner that could benefit the U.S. consumer, but not necessarily the stock price of Disney or of its competitors? Where Disney Stock Price is NowOver the past year, Disney stock price is up about 20%. Prior to 2019, between late 2015 and late 2018, DIS stock had not done much for shareholders as it hovered around the $100 per share level.Let us briefly remember how the stock has traded since early April: On Apr 11, prior to Disney's investor day presentation, the share price closed at $116.60. The next morning, DIS stock gapped up to open at $127.91. Then, on April 29, DIS stock reached what was then an all-time high of $142.37.In early May, Disney stock gave back some of its April gains, mirroring the stock market's volatility. On May 31, the stock saw $130.78. June and July were once again good to shareholders, as the stock reached an all-time high of $147.15 on July 29. Since then, investors have been taking money off the table and Disney stock is hovering around $135.As a result of the recent declines, the technical outlook of Disney stock has been damaged. Its short-term chart still looks weak, and DIS share price looks poised to exhibit even further volatility in the near-term.Despite this recent fall in the price of Disney shares, there might still be further declines. In the next several weeks, I expect DIS stock to be choppy and its price to decline below the $130 level, possibly toward $120. The Bottom Line on DIS stockSo what should investors think about Disney shares right now? The acquisition costs and the direct-to-consumer costs have been considerable. Yet Disney management is at this point ready to rack up losses in the streaming space. They are of course hoping to collect sizeable recurring revenue from subscribers both in the U.S. and worldwide. * 10 Marijuana Stocks That Could See 100% Gains, If Not More Therefore, investors will have to keep an eye on Disney's costs as well as other fundamental metrics in the coming months to see if the long-term prospects are still in place. Several bearish trends have recently been emerging in DIS stock. I'd say hold off investing in Disney shares until we have more data in the coming months. There might be a few more bumpy quarters ahead of us.At the time of writing, the author did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Will Disney+ Be the Next Catalyst for DIS Stock? appeared first on InvestorPlace.
For a stock that gets as much attention as Netflix (NASDAQ:NFLX), one "minor" detail seems to be going overlooked these days. Down more than 23% from its 52-week high, Netflix stock, believe it or not, is currently mired in a bear market.Source: Riccosta / Shutterstock.com So what's ailing once-beloved Netflix stock? Fortunately, the question is easy to answer, but where things get murky is how well the company is going to answer the query.Much of the recent lethargy in Netflix stock is attributable to rising competition in the streaming space. While it felt like Netflix had the streaming universe mostly to itself for awhile (it did), this landscape isn't one conducive to quasi-monopolies as Amazon (NASDAQ:AMZN) has in online retail or as Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL) has in Internet search.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Marijuana Stocks That Could See 100% Gains, If Not More Every day, companies in all industries contend with rivals. Often, the results of the tussles boil down to quality of the competitors and how deep their pockets are. That's some of the bear thesis with Netflix stock. Streaming rivals include Amazon, Apple (NASDAQ:AAPL) and Walt Disney (NYSE:DIS). All three are or will soon make significant streaming strides and they have the resources to pinch Netflix.Competition could beget more lost subscribers, long the bane of Netflix stock. Explaining why Netflix stock has struggled since its second-quarter earnings report just over a month boils down to the 126,000 lost domestic subscribers when Wall Street was expecting the addition of 352,000. The 2.8 million international additions were overshadowed due to that number missing estimates by two million. There's Hope for NFLX Stock … Sort OfYes, there's a bull case for Netflix stock, but investors willing to exercise some restraint may be able to get pricing than they see today for a couple of reasons. First, some of the aforementioned competition, such as Disney+, is coming soon, and as companies update on that front, Netflix stock could be dinged. Second, the chart on Netflix is not attractive from the long side.While investors may be lacking enthusiasm for NFLX stock at the moment, some data points indicate subscribers may be renewing affinity for the streaming provider's wares."It's still early in the quarter, but data through July looks solid (rebound from 2Q)," said SunTrust Robinson Humphrey analyst Matthew Thornton in a recent note. "Google searches (on keyword "Netflix") and mobile app downloads for the month also show nice upticks vs 2Q19 and back toward or above the 1Q19 high-water-mark."New content could be a catalyst for Netflix stock, but there are costs associated with that and NFLX has a history of losing money. Plus, the company's cancellation track record confirms it's more likely to make a new dud than another "Orange Is the New Black." Bottom Line on Netflix: Fierce CompetitionIn its early days, Netflix had pricing power, which enabled it to raise subscription fees without much churn. But with an onslaught of new competitors in the streaming world, pricing power is diminishing."Larger firms like Disney and WarnerMedia are launching their own SVOD platforms to compete against Netflix," said Morningstar in a recent note. "We think this usage pattern and increased competition will constrain Netflix's ability to raise prices without inducing greater churn."The research firm notes that while admirable, international expansion efforts by Netflix carry no competitive advantage, because its global and local rivals can adjust their own content budgets to go head-to-head with Netflix.Thanks to companies like Roku (NASDAQ:ROKU) that are driving pay TV prices lower through over-the-top delivery, Netflix may not be able to apply much more upside pressure to its $13 a month base subscription fee. In lieu of significant subscriber growth, lost pricing power is a headwind for NFLX stock that must be acknowledged.Todd Shriber does not own any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post Netflix Can't Chill: Too Many Worthy Competitors Are Looming appeared first on InvestorPlace.
While ESPN broadcasts a Wednesday night Little League World Series elimination game in traditional form, ESPN2 will offer a "kidscast," where two 16-year-old aspiring broadcasters will offer commentary from the booth in Williamsport, Pa.
If you haven't heard about the Star Wars franchise, you've probably been living under a rock. When the first film was released in just 42 theaters in 1977, few would have predicted that the franchise would be around decades later—much less trading hands between two huge film companies for over $4 billion. The franchise accounted for the bulk of the deal's value, though some consideration was paid to films in which Harrison Ford wears a funny hat.
Since its disappointing earnings report last month, Netflix (NASDAQ:NFLX) stock has declined 17%. And the pressure hasn't let up of late: Netflix stock has reached its lowest levels since last December.Source: Flickr via Mike K.It's not difficult to see why. Netflix stock is a story based on subscriber growth, as I wrote after NFLX reported disappointing user metrics in last year's second quarter. And its numbers on that front were terrible in its recent Q2 report.With Netflix stock now back below $300, some investors might see a "buy the dip" opportunity at this point. The growth of streaming is going to continue, and NFLX remains the leader of that market. Indeed, I've recommended buying NFLX stock on weakness in the past; in November, I called the stock the best contrarian bet in tech.InvestorPlace - Stock Market News, Stock Advice & Trading TipsBut this is a different situation. The selloff late last year was driven by external factors - most notably, a plunging stock market that dragged down many, if not most, highly-valued growth stocks with it. NFLX itself was performing reasonably well. And in fact, there was (and is) an argument that Netflix stock would benefit from a recession, which might accelerate cord-cutting as consumers look to save money. * 10 Marijuana Stocks That Could See 100% Gains, If Not More The recent selloff of Netflix stock is based on the company's performance, however. And as weak as that performance looked in Q2, when combined with what's going on elsewhere in the U.S. content sector, it's something close to disastrous. As a result, it can get worse before it gets better for Netflix, and for Netflix stock. Q2 Subscriber Numbers Hammer NFLX StockNetflix's headline numbers actually looked solid. GAAP EPS of 60 cents beat consensus expectations by 4 cents. Revenue of $4.92 billion rose 33% and was in-line with analysts' average estimates.But the subscriber figures were the big issue for Netflix stock, and led to a 10.3% decline by NFLX stock. Net paid subscriber additions of 2.7 million badly missed the company's guidance of 5 million. As a helpful chart in the Q2 shareholder letter showed, that was the biggest miss relative to guidance since at least the beginning of 2016.And it was the U.S. market that caused the miss. Netflix's U.S. paid subscriber count actually declined in the quarter for the first time since 2011.That alone likely drove investors to flee Netflix stock. But NFLX has continued to fall, dropping another 8% from its immediate post-earnings levels. That continued decline may come from a growing realization that the quarter was even worse than investors initially realized. The Content Question for NFLX StockOne of the reasons that Netflix stock has been so divisive is that the company continues to burn cash. Its content spending is expected to come in above $15 billion this year.That spending makes some sense. Instead of licensing content - and paying for it annually - NFLX essentially is buying its content upfront. Free cash flow now might be negative, but if that content drives subscriptions down the line, its free cash flow several years from now will be higher, making the near-term investments worthwhile.But that strategy only works if subscribers will stay with NFLX for a long time, allowing that content to be monetized in future years. That alone makes the Q2 subscriber decline concerning. So does a widely-cited passage from the company's shareholder letter: "We think Q2's content slate drove less growth in paid net adds than we anticipated."If that's the case, NFLX has a problem. It means the company can only keep adding subscribers if it continues to spend a great deal on content That sounds an awful lot like the old joke about selling at a loss, and making it up on volume. If Netflix's content budgets can't come down, free cash flow will stay negative or at best modestly positive. And that does not support the market capitalization of NFLX stock, which still sits at $130 billion. Where Are the Cord-Cutters Going?There's another major concern about Netflix's Q2 results. Specifically, Netflix's weak performance came at the same time that cord-cutting appears to have accelerated.Indeed, legacy cable companies had a horrible quarter. AT&T (NYSE:T) lost almost 1 million video subscribers. Comcast (NASDAQ:CMCSA) and Charter Communications (NASDAQ:CHTR) lost a combined total of nearly 400,000 viewers.Industry analyst MoffettNathanson called the quarter "freaking ugly" for cable companies and projected an unprecedented 5.5% cord-cutting rate in the quarter.So the question relative to Netflix numbers is: where are these subscribers going? One answer might be Hulu, now majority-owned by Disney (NYSE:DIS). At the Disney Investor Day in April, the company said Hulu had more than 25 million paid subscribers. Earlier this month, the company said the figure was "approximately 28 million."Whatever the case, Netflix should have been set up to have a blowout Q2 on the subscriber front in the U.S. Instead, it posted a stunning decline. In that context, its performance looks even weaker, and more concerning, than a simple guidance miss. The Competitive Concern for Netflix StockI wrote ahead of NFLX's Q2 results that the earnings report was critical for Netflix stock. And a key reason is that new competition is on the way from Disney, AT&T, and Comcast.Netflix, in its shareholder letter, wrote that it didn't think competition was a key factor in the disappointing subscriber numbers. That may well be true. But competition will be a factor in 2020, when those streaming services - with a great deal of content, backed by high marketing budgets - come online.And so investors can rightly wonder: if Netflix's U.S. subscriber growth is stalling out already, what happens when its competition increases next year? Real ConcernsNetflix stock bulls might respond that the U.S. isn't Netflix's only market. That's true: the company now has more subscribers overseas than in the U.S. More of its revenue comes from overseas as well.But about two-thirds of its profits still come from the U.S.. America is still the company's key market. And with NFLX stock trading at 53 times analysts' average 2020 EPS estimate, a stumble in the U.S. is likely to prove damaging for Netflix stock.On the other hand, the company's Q3 guidance was strong, and it's possible NFLX can bounce back. But its Q2 performance raises real questions and suggests more downside for Netflix stock could be ahead. It's the type of quarter that raises concerns about the company's overall strategy and market positioning, as well as the valuation of NFLX stock.And that's why it's been the type of quarter that leads not only to a big post-earnings decline, but more selling in the following weeks. Investors who buy the dip of Netflix stock do so at their peril.As of this writing, Vince Martin has no positions in any securities mentioned. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks That Could See 100% Gains, If Not More * 11 Stocks Under $10 to Buy Now * 6 China Stocks to Buy on the Dip The post The Concerning Combination Pressuring Netflix Stock appeared first on InvestorPlace.
Star Wars fans are living their dreams in the Black Spire Outpost on planet Batuu as the $1 billion Galaxy’s Edge expansion to Disney’s Hollywood Studios approaches its official debut. The 14-acre land recently hosted a limited number of Walt Disney World Resort annual passholder previews as the Aug. 27 media event and Aug. 29 grand opening close in. References to the original Star Wars films are around every corner.
(Bloomberg Opinion) -- Three years ago this month, Hollywood executive Peter Chernin and AT&T Inc. CEO Randall Stephenson shared a dinner on Martha’s Vineyard. Stephenson is still waiting for his dessert to arrive. It was the meal that sparked the idea for Stephenson, a practically lifelong member of the staid telephone industry, to enter the TV and film business by acquiring Time Warner, a then-$60 billion giant of the media world. After Stephenson struck the deal, he told Bloomberg News that it was Chernin who “first got me to appreciate the library that this company owns.” That library includes HBO, with hits like “Game of Thrones” and “Succession;” the Warner Bros. studio, which that year had an almost 17% share of the box office; and the rights to “Friends,” a sitcom that hasn’t aired fresh episodes in more than 15 years but has taken on new life as the Holy Grail of the streaming-TV market.In June of last year, 601 days after the companies agreed to merge, Time Warner officially became part of the Dallas-based wireless-phone carrier, defeating an attempt by the U.S. Justice Department to block the transaction. AT&T’s WarnerMedia division, as the Time Warner assets are now called, is seen as one of the biggest threats to Netflix Inc., though it doesn’t yet have a competing product to show for it. In fact, little more has come out of the WarnerMedia acquisition so far than reports of culture clashes, differing visions and high-profile personnel exits.According to the New York Post this week, some HBO staffers have been put off by the brusque management style of their new WarnerMedia boss John Stankey, a longtime AT&T executive. The Dallas-based C-suite is putting pressure on its Hollywood employees to ramp up HBO’s production slate as they coalesce around building a new streaming app named HBO Max, the strategy for which is still nebulous and seems to keep changing. They have a deadline to unveil the product to investors on Oct. 29. Later in the year, HBO Max will officially join the alphabet soup of video services already offered by AT&T:The subscription on-demand product sounds akin to Walt Disney Co.’s Disney+ and Apple Inc.’s Apple TV+, which are both launching within the next three months and gunning for Netflix Inc.’s subscriber base. They’re spending billions of dollars to fill out their apps with HBO-quality content. In theory, AT&T is sitting on a set of assets best suited to draw a wide streaming audience, with HBO’s high-quality programming, plus news, sports, comedy, cartoons and popular films. But merger integration issues and AT&T’s lack of experience in the content business pose major challenges.The price could also turn off subscribers. HBO Max is expected to charge a few dollars more than the stand-alone HBO Now app, which at $15 a month is higher than Netflix’s $13 monthly fee and more than double the $7 that Disney+ will charge. In fact, bundling Disney+, Hulu and ESPN+ will be just $13. The irony is that while Stephenson tries to transform AT&T into a media conglomerate, the wireless business that’s effectively been overshadowed by the merger is improving. It's the healthiest area of the company. Wireless accounted for 37% of AT&T’s revenue in the last 12 months, but it was nearly 50% of Ebitda, according to data compiled by Bloomberg. That cash flow is helping AT&T contend with a heavy debt load, which stood at $194 billion as of June. Wireless network performance has gotten better as new spectrum has been deployed, boosting AT&T’s image as the carriers transition to 5G service. Based on scoring by various outlets that track wireless connections, AT&T was able to crown itself America’s “fastest, best and most reliable network,” which are useful bragging rights for TV ads as the industry battles for customers. More important, AT&T is saving money through a public-private contract it won to build FirstNet, a network for first responders. Put simply, while AT&T’s workers climb towers to set up FirstNet, they’re also prepping its airwaves for 5G.These improvements haven’t yet reduced churn, or the rate at which customers are leaving AT&T, but that could be next should the wireless business stay on track. And if T-Mobile US Inc.’s takeover of Sprint Corp. overcomes state opposition (16 attorneys general have sued to block the deal), there will be one less competitor for AT&T and a chance to raise prices.AT&T’s DirecTV satellite business continues to shrink, with the company losing 946,000 video subscribers in the second quarter, including DirecTV Now customers who canceled in the wake of price hikes. That streaming service was recently renamed AT&T TV Now as the company moves away from the fading DirecTV brand. It also introduced a new service this week in certain markets called AT&T TV, which is a similar live-TV and on-demand app with various package options, but also involves using a streaming box where users can access other services they may subscribe to, such as Netflix. It became clear this week that AT&T TV and HBO Max together are at the center of Stephenson’s vision for the new AT&T.The idea must have seemed so sweet three years ago. But peering into the kitchen, it’s all still a bit hectic. He'll have to keep waiting for that dessert.To contact the author of this story: Tara Lachapelle at firstname.lastname@example.orgTo contact the editor responsible for this story: Beth Williams at email@example.comThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tara Lachapelle is a Bloomberg Opinion columnist covering deals, Berkshire Hathaway Inc., media and telecommunications. She previously wrote an M&A column for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
If I told you at the beginning of 2019 that two of your stocks would deliver 11% and 25% total returns through the first seven-and-a-half months of the year, you'd have gladly taken that performance. Well, that's precisely where Netflix (NASDAQ:NFLX) and Disney (NYSE:DIS) today, a little more than halfway through August. Unfortunately, for owners of Netflix stock and Disney stock, Roku (NASDAQ:ROKU) stock is up 338% year to date through August 12, leaving both entertainment stocks in the dust. Source: jejim / Shutterstock.com Clearly, Roku is the best entertainment stock in 2019. What happens to Netflix stock in 2020? Disney has a formidable video-streaming bundle out in November that could take market share from Reed Hastings & Co. Meanwhile, Roku doesn't care what you watch as long as you do so through the Roku platform or on one its player devices.InvestorPlace - Stock Market News, Stock Advice & Trading Tips * 10 Undervalued Stocks With Breakout Potential Seems like the answer to the question which of Netflix, Disney and Roku stock are good, better, and best, has already been answered by investors.Here are my two cents on the subject. Netflix StockNFLX didn't have a great July, down 12.1% while the S&P 500 eked out a 1.3% return on the month. By comparison, Disney was up 3.0% and Roku gained a whopping 14.1%, significantly better than either of the entertainment veterans. Netflix had some good news and bad news to deliver in July. On the plus side, its revenues and operating income grew by 26% and 53% respectively during the second quarter, precisely what management was expecting. The bad news was that Netflix planned to add 5 million new subscribers during the quarter ended June 30. Instead, it added just 2.70 million, well below its guidance and half the 5.45 million net subscribers it added in Q2 2018. Despite Netflix being known for missing badly on one quarter a year, investors took that as a big sign the days of significant growth were grinding to a halt -- and down went Netflix stock.There were two big reasons for Netflix's weak quarter.The first had to do with price increases in several countries where it operates. Once it upped the monthly fee, some price-conscious customers bolted. Secondly, it added so many new customers in Q1 2019 and Q4 2018 -- 9.6 million in Q1 2019, 700,000 more than forecast, combined with adding 8.8 million new customers in the fourth quarter, 1.2 million more than it forecasted for that quarter -- that is was entirely likely that Q2 2019 was going to be a dud. By no means does it suggest that the Netflix business model is broken. Disney StockFor the better part of three years, Disney stock traded in a range between $100-120. In 2019, due to the completion of its 21st Century Fox acquisition and the soon-to-be-released Disney+ video streaming, DIS came alive. At least until it announced Q3 2019 results that showed the highly anticipated launch of Star Wars: Galaxy's Edge, the most significant addition to Anaheim Disney in its history, was anything but a success. Disney stock dropped more than 6% on the news, the most it's fallen since August 2015. Also, to get Disney+ up and running, the company's direct-to-consumer business lost $553 million in the quarter as a result of spending for movies and TV shows for the new video streaming service.As a result of these problems, Disney's adjusted profit in the third quarter was $1.35 a share, 40 cents below the average analyst estimate. "The market will be disappointed with the top- and bottom-line misses," said Richard "Trip" Miller, founder of Gullane Capital Partners, on August 7. "This is a transition quarter for Disney, as they onboard Fox assets and spend capital to invest in the three direct-to-consumer products."I couldn't agree more. Disney's new video-streaming bundle is going to be a real thorn in the side of Netflix. At $12.99, it could be a Netflix killer. Roku StockA few days ago, I wrote about the great strides Roku has made in its business model, so I'm not going to say much about its stock. However, what I can say is that I love its business model. The company continues to generate significant growth in its active accounts and those active accounts are watching a lot more content translating into much higher average revenues per user. By introducing premium subscriptions, Roku will be able to continue to monetize its video streaming platform in the future.The one thing that's been holding Roku back is a GAAP profit for an entire fiscal year. It's got a shot at being profitable in 2019, but 2020 is more likely. As I've said several times in the past year, when Roku delivers an annual GAAP profit, Roku stock will skyrocket to $200 and beyond. Good, Better, Best In August, Needham analysts Laura Martin and Dan Medina stated that they felt Roku was a better stock to back than Netflix because while it struggles to get paid subscribers, Roku's 80 million users account for a significant chunk of the $70 billion U.S. television ad market. "Roku is the dominant internet aggregator for streamed TV & movie content, like YouTube is for user generated content, at about 1/20th the valuation," Martin and Medina wrote in a note to clients. * The 10 Best Marijuana Stocks to Buy Now I like Netflix stock, I do. However, when it comes to good, better, and best, Roku stock is best, Netflix is better, and Disney is good. Own all three if you can.At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 10 Marijuana Stocks to Ride High on the Farm Bill * 8 Biotech Stocks to Watch After the Q2 Earnings Season * 7 Unusual, Growth-Oriented REITs to Buy for Your Portfolio The post Who Will Win the Streaming Wars? Netflix, Disney or Roku Stock appeared first on InvestorPlace.
Disney World will soon open a Star Wars themed hotel named the Galactic Starcrusier. However, Disney revealed in its last earnings report that attendance dropped at its theme parks. Yahoo Finance’s Dan Roberts, Sibile Marcellus and Kristin Myers sit down and discuss.
Disney's upcoming streaming platform Disney+ will be here in November, and the first details about its international premier have been revealed.