Whatâs Going On Here?Disney reported better-than-expected results late last week, and â surprise, surprise â it had Baby Yoda almost entirely to thank. What Does This Mean?Disneyâs theme parks havenât exactly been the Happiest Places on Earth this year, but at least losses in that part of its business came in lower than analysts were predicting. And even if the pandemicâs scrubbed a little of the magic from the Magic Kingdom, Disney+ has cast a pretty effective spell of its own: the virus-proof streaming service welcomed an expectation-busting 16 million new subscribers last quarter, bringing the grand total to 74 million (tweet this). Thatâs a pretty tidy way for Disney+ to celebrate its one-year anniversary, and already launches the company past the 60 million subscriber target itâd hoped to hit by 2024. Why Should I Care?Zooming in: Make a wish, Disney.
Whether Disney can hold on to all those subscribers is its next challenge: a lot of them signed up to bundles or one-time promotions, and some of those â including a free trial for Verizon customers â are set to expire soon. No doubt Netflix is watching closely: the streaming pioneer has built up 195 million subscribers over the course of a mostly competitor-free few years, and its lead is suddenly looking a bit more beatableâŠ
Zooming out: A little more Netflix, a little less Six Flags.
Disney has big plans to invest even more in its streaming business, which is why it took the opportunity to tell investors it wouldnât be paying them a dividend. That wonât come as a surprise to activist investor and one major shareholder Third Point Capital, which urged Disney to cut payouts just last month. The firm thinks investors will be willing to pay a higher price for Disneyâs stock if it focuses its money and efforts on its streaming business, which has far more growth potential than, say, its theme parks. | 