Investing

Disney (DIS) Has Been Atrocious for Investors, but Is Moving Back to a Buy Right Now

Austin Smith

Published: January 24, 2025 9:15 am

24/7 Wall St. Key Points:

• To improve its sports-oriented offers, Walt Disney Co. (NYSE: DIS) is combining its streaming services—Disney+, Hulu, and ESPN+, and collaborating with fuboTV Inc. (NYSE: FUBO).
• Proven successful by Netflix Inc. (NASDAQ: NFLX), the ad-supported streaming model provides Disney with a route to improved revenue.
• Disney’s best days may be behind it, but the Next Nvidia stocks are just warming up. Click here to see how they could drive incredible returns in 2025.

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Transcript:

[00:00:04] Douglas McIntyre: So Disney, which has had an atrocious history in, in streaming, Disney Plus was started in 2019, lost billions of dollars. It finally made like a dollar. Last quarter, Disney Plus and you know, they’ve got, Disney’s got Hulu and EPN plus all this stuff, so they just did another deal. Can you walk us through that?

[00:00:29] Lee Jackson: Sure they decided that they would say, since they got a little positive data on streaming that they would kind of merge and come together with a small company named Fubo Fubo was kind of a streaming service that focused on. Sports and focused on you know, you can watch like six football games at once and all this kind of stuff this is kind of smart on Disney’s part because streaming has replaced what what used to be a, you know, kind of common cable, you know that everybody wanted for a zillion different channels and some of them were Good and some of them aren’t but I think by doing the Fubo deal They they kind of kids they get some of the litigation that was out there. You know kind of put to the side because Fubo I think was suing everybody but I think now paramount’s coming back in to maybe lay the hammer down, but it’s probably not a bad idea just because There’s people that want I mean again, nobody goes to cable anymore I mean, they just don’t and and it’s too expensive and it’s crappy and and so everybody even if you’re Senior citizen status like myself.

[00:01:45] Lee Jackson: Well, we have Hulu and you could go to, you know, YouTube streaming. There’s a bunch of them. Slingbox. There’s a bunch. But I think this merger is kind of a smart idea for Disney.

[00:01:57] Douglas McIntyre: Well, to me it moves Disney back into the buy category because

[00:02:02] Lee Jackson: Yeah.

[00:02:03] Douglas McIntyre: Streaming is the wave of the future. I think this is smart for Disney because now you’ve got sports tiered, you’ve got an ESPN product, you’ve got this product, you’ve now got films tiered. You’ve got Disney plus you’ve got Hulu. And then across most of these, you also have a second tier, which is you can go, if you’re a customer, you can go ad supported or not ad supported.

[00:02:27] Douglas McIntyre: The ad supported costs some money. Now, the information that’s coming out of Netflix is, is that the advertising based streaming business is tremendous. There was, there was this worry is, is that, well, if you decide that you’re going to take the advertising and give up on, you know, paying the subscription price, that that’s going to hurt Netflix and its competitors, you know, they won’t make as much money.

[00:02:52] Douglas McIntyre: Guess what? It turned out that all of a sudden, if you were worried about Netflix. When it came to this, don’t, they disclosed that it’s just,

[00:03:01] Lee Jackson: not.

[00:03:02] Douglas McIntyre: it’s gang bust.

[00:03:03] Lee Jackson: Netflix streamed that NFL game on Christmas Day, it had massive viewership. You know, because Netflix is all around the world. But, I mean, when, when Netflix streamed that, it was huge. And when they did the fight, it was huge, even though the fight had some glitches in it. But with Iron Mike, you know, out there, I think it was 50 million. So you’re right. Streaming is the future. And from an advertising based standpoint, it’s gonna be huge.

[00:03:34] Douglas McIntyre: Well, I think in general, sort of the trends in streaming are good for Netflix, they’re good for Amazon (NASDAQ: AMZN), but Amazon Prime Video is like one, one 10th of 1 percent of Amazon’s revenue. So the fact, if you said to me, wow, that’s just fantastic. It’s like, well, I know, but what about Amazon web services where they make all their money?

[00:03:56] Douglas McIntyre: But finally, I think Disney is sort of moving in the direction where they’ve rationalized their streaming businesses and you know, Iger has sort of got this stuff lined up now so that there’s a good chance that these things are not just profitable, but that they start to become very profitable. And Disney starts to become a mini Netflix in that part of its business.

[00:04:21] Lee Jackson: Right. And even if they just print small profit margins, that’s all you need because, you know, the big monster theme parks and all that will continue to rake in the dough. But you know, if you’re going to stay in the business, you want to at least be able to be competitive, put out a good product. And like I said, I’ve had Hulu for a long time now, well, not long, two, three years, since I had to switch from AT&T (NYSE: T) U verse because they basically said, Hey, you gotta stream this and you’re not gonna have it. And that didn’t work at all. ’cause they had bad sink issues. and not kitchen sink. You know, you, you’d see the guy say something and his voice would be a little outta sync and you’re like, you can’t watch that. It’s just horrible. So yeah, I think it’s smart for Disney and you know, probably they can monetize Hulu even better.

[00:05:10] Douglas McIntyre: Well, so, I’ve gone from being a real bear on Disney for a long time, pretty much since before they brought Iger back toas a stockholder, I would be guardedly optimistic about, about Disney.

[00:05:25] Lee Jackson: Yeah, it’ll be interesting to see the first quarter numbers, or the fourth quarter numbers that are reported in Q1.