The Queen’s Gambit on Netflix and Disney’s Mickey Mouse
Netflix; CNBC
Disney and Netflix are proud of the stories. Now they have changed the place when it comes to the stories they tell on Wall Street.
Netflix said Tuesday that it will consider buying the shares for the first time since 2011. After nearly a decade of $ 15 billion in loans to finance the original content, Netflix said Tuesday that it intends to have a positive cash flow after 2021 and that it will no longer need external financing for its operations.
Meanwhile, Disney temporarily halted its dividend last year and heard calls from activist investor Dan Loeb to permanently close the $ 3 billion annual payment to shareholders. Loeb wanted Disney to incorporate this money into the original content, using Netflix’s amazing $ 11 billion to $ 220 billion model.
Although Disney has not yet completed its dividend, the company is focusing its operations on streaming. Disney plans to release dozens of Star Wars, Marvel and Pixar movies and series in the coming years for its Disney + broadcast service. The service gained over 86 million subscribers in one year, well ahead of Disney’s initial expectations, and the company now expects between 230 and 260 million subscribers by 2024.
“It’s very impressive what Disney did,” Netflix co-CEO and co-founder Reed Hastings said during the Netflix conference call. “It’s an incredible execution for a headline that pivots to deal with insurgents. It shows that members are willing and interested in paying for more content because they’re hungry for great stories. And Disney has great stories.”
But while Hastings still refers to Disney as the headline, investors see a different picture. There is a reason why Disney shares gained over 2% after hours in Netflix news, which sent Netflix shares over 12%. Investors don’t see the battle 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 world of streaming video, Netflix is the owner and Disney the upstart.
The student became a teacher.
SEE: Netflix: We’ll be cash-neutral this year, positive every year thereafter