The Queen’s Gambit on Netflix and Disney’s Mickey Mouse
Netflix; CNBC
Disney and Netflix are proud of storytelling. Now they have changed places when it comes to the stories they tell Wall Street.
Netflix said Tuesday it would consider repurchasing shares for the first time since 2011. After nearly a decade of borrowing $ 15 billion to fund the original content, Netflix said Tuesday that it intends to keep cash flow positive by 2021 and no longer need outside funding. for its operations.
Disney, meanwhile, temporarily halted its dividend last year and urged activist investor Dan Loeb to permanently end its $ 3 billion annual payment to shareholders. Loeb wanted Disney to direct that money to original content, using Netflix’s striking $ 11 billion to $ 220 billion media giant as a model.
Although Disney has not yet ended its dividend, the company is focusing on operations. Disney plans to launch dozens of Star Wars, Marvel and Pixar movies and series in the coming years for its flagship streaming service, Disney +. The service received more than 86 million subscribers in a year, which is better than Disney’s original expectations, and the company now expects between 230 and 260 million subscribers by 2024.
“This is extremely impressive what Disney has done,” said Reed Hastings, co-CEO and co-founder of Netflix, during Netflix’s earnings conference. “It’s an incredible accomplishment for a incumbent to tackle the insurrection. It shows that members are willing and interested to pay more content because they are craving great stories. And Disney has great stories.”
But while Hastings still refers to Disney as the incumbent, investors see a different picture. There’s a reason Disney shares gained more than 2% on Netflix’s news after hours, causing Netflix shares to rise by more than 12%. Investors do not view the fight as Disney versus Netflix. They see that Disney wants to be like Netflix, and there is room for both.
Netflix was founded in 1997. Disney has been around for almost 100 years.
But in the streaming video world, Netflix is the incumbent and Disney the starting button.
The student became a teacher.
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