Holiday Guide to the Entertainment Industry: Disney Tear Down

Vishesh Kumar

The content juggernaut powers the cinematic experience for global audiences and has its formula down.

If content is king, as the adage goes, then Disney (NYSE: DIS) is the king of content.

Disney was the top grossing studio in the US between 2016 and 2018 with over $3 billion in box office receipts over that period, analysts at Morningstar note. The content juggernaut built on that success with a spectacular 2019. Six of the company’s releases have grossed more than $1 billion at the box office this year.

Screen Shot 2019-12-19 at 2.57.19 PM

 

Now, as the holiday season comes to a close, investors will be watching closely to see that the company can continue to deliver in 2020 on the lofty expectations baked into the stock. Beyond that, the company will have to continue to deliver on its big bet on content: the $71 billion purchase of 21st Century Fox in March of this year.

The acquisition allows Disney to further deepen its reservoir of the most compelling content. With the addition, Disney now owns 12 of the top 20 films in terms of worldwide box office distribution, Morningstar notes.

And as it dominates the big screen, Disney is now setting its sight on the rapidly expanding Direct-to-Consumer (DTC) market. Disney +, its subscription streaming service, and high-profile ad-supported streaming player Hulu - which Disney gained control of as part of the Fox deal - are key initiatives for the year ahead and closely watched by investors.

Continuing to create the unrivaled content consumers and investors have come to expect this holiday season will only be the beginning for the company. Finding new and innovative ways to deliver it directly will be a closely-watched challenge in the year ahead.

Below we use AlphaSense Sentiment Analysis to identify key developments and the outlook for the company:

Q4 2019 Earnings Call, Robert A. Iger, The Walt Disney Company - Chairman & CEO:
 
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