the.dreamfinder
Well-Known Member
Like record stores and bookshops.
But exhibition is an incredibly expensive industry and rebuilding it wouldn’t come cheap and may end up being compromised by studio controlled circuits.
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News Disney announces strategic restructuring of media and entertainment divisions.
- Thread starter DCBaker
- Start date
But exhibition is an incredibly expensive industry and rebuilding it wouldn’t come cheap and may end up being compromised by studio controlled circuits.
DDLand
Well-Known Member
A couple thoughts on this...
Something is brewing. I’m starting to think Chapek is frustrated with Disney’s valuation. 2020 was supposed to be the year Netflix would face extreme headwinds as a slew of streaming services entered the market. Investors don’t seem to care though. From the beginning of this calendar year, Netflix has risen an astonishing 70%! Investors are extremely excited about Netflix’s potential as a disrupter. How has Disney stock done since the beginning of the year? Not so well. It’s down roughly 20%.
Disney+ has been off to a successful start, but legacy assets (think theme parks, films, ESPN) have been dragging the valuation down. Despite trillions of dollars being pumped into markets, none of the stimulus/Fed money has made its way to Disney’s valuation. This has got to be extremely frustrating to Chapek, who likely feels Disney+ is relatively undervalued. Right now, if Disney+ and Hulu were publicly traded as a separate company, I wouldn’t be surprised if they would be worth $100 Billion+. Maybe more. That may sound bonkers for a company that is still early in its growth and not posting a profit, but that is not dissimilar to Netflix. While Netflix has been able to flex its pricing power and has a large installed base, costs have soared as they seek out new content. Netflix will likely continue adding debt for years to come as they reinvest all their earnings into content. But even then, right now, Netflix is worth $244 Billion. The entire Walt Disney Company is only worth $233 Billion as of today. That means the scrappy upstart Netflix is now worth more than the nearly century old media behemoth that owns Disneyland, Mickey Mouse, Iron Man, and Darth Vader. It’s actually crazy.
So what’s the difference between Netflix’s valuation and Disney’s? It’s not profitability. While Disney has had a rough year, over the last five years Disney has raked in billions while Netflix added debt. It’s also not brands or content. Netflix doesn’t have anything comparable to Donald Duck or Spider-Man. And it’s not returning money to shareholders. Netflix has returned nothing while Disney has paid handsome dividends and bought back billions of shares. What is it then? Hype! People believe Netflix can grow to be worth 100s of billions more than it is today. And despite Disney having an entity that could be just as profitable, if not more, no one is excited about Disney. It’s tired, and it’s exposed to decaying industries.
It’s like offering a kid one of two types of Macaroni and Cheese. One is straight up noodles and cheese, and the other is the same except with peas in it. Which is the kid going to choose? #peafree
Chapek is now trying to get more recognition for a business he feels is undervalued. That means sidelining other businesses and focusing all firepower on direct-to-consumer. He doesn’t want to be a movie studio. He wants to be a tech company with tech valuations.
What does this mean going forward? Will there be spin offs, IPOs, or asset sales? Too early to say for certain, but I think The Walt Disney Company is going to go through radical change over the next few years. While Iger undoubtably brought radical change, it was still broadly the same corporate structure as Eisner’s Disney. Chapek is tearing apart divisions that have existed for 25+ years. It’s madness. Do theme parks factor into the next Netflix? Probably not. But a rapid recovery may change that. Honestly, a royalty check from a private equity firm seems more natural...
Oh, one to watch. Kareem Daniels, a guy who has followed Chapek around Disney, seems like a rising star. HE is somebody who is interesting. He was Chapek’s chief of staff, rose rapidly, and has wide experience throughout the company. I thought Campbell was a rising star, but she just got pushed into reporting to Daniels. That was actually shocking. Daniels is the one to watch. He’ll either flame out catastrophically or become the next CEO.
Something is brewing. I’m starting to think Chapek is frustrated with Disney’s valuation. 2020 was supposed to be the year Netflix would face extreme headwinds as a slew of streaming services entered the market. Investors don’t seem to care though. From the beginning of this calendar year, Netflix has risen an astonishing 70%! Investors are extremely excited about Netflix’s potential as a disrupter. How has Disney stock done since the beginning of the year? Not so well. It’s down roughly 20%.
Disney+ has been off to a successful start, but legacy assets (think theme parks, films, ESPN) have been dragging the valuation down. Despite trillions of dollars being pumped into markets, none of the stimulus/Fed money has made its way to Disney’s valuation. This has got to be extremely frustrating to Chapek, who likely feels Disney+ is relatively undervalued. Right now, if Disney+ and Hulu were publicly traded as a separate company, I wouldn’t be surprised if they would be worth $100 Billion+. Maybe more. That may sound bonkers for a company that is still early in its growth and not posting a profit, but that is not dissimilar to Netflix. While Netflix has been able to flex its pricing power and has a large installed base, costs have soared as they seek out new content. Netflix will likely continue adding debt for years to come as they reinvest all their earnings into content. But even then, right now, Netflix is worth $244 Billion. The entire Walt Disney Company is only worth $233 Billion as of today. That means the scrappy upstart Netflix is now worth more than the nearly century old media behemoth that owns Disneyland, Mickey Mouse, Iron Man, and Darth Vader. It’s actually crazy.
So what’s the difference between Netflix’s valuation and Disney’s? It’s not profitability. While Disney has had a rough year, over the last five years Disney has raked in billions while Netflix added debt. It’s also not brands or content. Netflix doesn’t have anything comparable to Donald Duck or Spider-Man. And it’s not returning money to shareholders. Netflix has returned nothing while Disney has paid handsome dividends and bought back billions of shares. What is it then? Hype! People believe Netflix can grow to be worth 100s of billions more than it is today. And despite Disney having an entity that could be just as profitable, if not more, no one is excited about Disney. It’s tired, and it’s exposed to decaying industries.
It’s like offering a kid one of two types of Macaroni and Cheese. One is straight up noodles and cheese, and the other is the same except with peas in it. Which is the kid going to choose? #peafree
Chapek is now trying to get more recognition for a business he feels is undervalued. That means sidelining other businesses and focusing all firepower on direct-to-consumer. He doesn’t want to be a movie studio. He wants to be a tech company with tech valuations.
What does this mean going forward? Will there be spin offs, IPOs, or asset sales? Too early to say for certain, but I think The Walt Disney Company is going to go through radical change over the next few years. While Iger undoubtably brought radical change, it was still broadly the same corporate structure as Eisner’s Disney. Chapek is tearing apart divisions that have existed for 25+ years. It’s madness. Do theme parks factor into the next Netflix? Probably not. But a rapid recovery may change that. Honestly, a royalty check from a private equity firm seems more natural...
Oh, one to watch. Kareem Daniels, a guy who has followed Chapek around Disney, seems like a rising star. HE is somebody who is interesting. He was Chapek’s chief of staff, rose rapidly, and has wide experience throughout the company. I thought Campbell was a rising star, but she just got pushed into reporting to Daniels. That was actually shocking. Daniels is the one to watch. He’ll either flame out catastrophically or become the next CEO.
Ldno
Well-Known Member
Can it close the gap? Level of ooooffff over 9000
www.hollywoodreporter.com
Disney’s Reorganization Raises More Questions for Investors
Walt Disney's decision to reorganize its content business with a focus on streaming drew much Wall Street reaction on Tuesday, earning much praise, even though experts also said it creates new questions for investors.
www.hollywoodreporter.com
Nubs70
Well-Known Member
I see Disney focusing on the single user experience. The idea of creating content to be consumed in high population settings is dead.
There's a lot of things off in your post, but I'll focus on the most egregious, the one above.
It was several years ago, not recently, that Iger, and not Chapek, made DTC the top priority of Disney Corporation. Iger's been saying so in quarterly calls since D+ was announced. This is all presumably with the Board's blessing.
Kareem Daniels while talented is a move in TWDC to improve diversity in the top ranks. Iger's been pushing this initiative.
the.dreamfinder
Well-Known Member
Disney wants dollars not dimes. After the pandemic, people will want what they had to be deprived of. Disney can make much more money in the long run with pay windows than with the drop it on SVOD model.
_caleb
Well-Known Member
This post is racist.
_caleb
Well-Known Member
“Pay windows?”
I definitely don’t think there’s going to be a theater boom “after” the pandemic.
Your opinion is flawed and personal attacks are uncalled for.
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DisneyCane
Well-Known Member
When did movie theatres (outside of specialty art houses) ever rely on avant-garde independent cinema for revenue? Since at least the late 70s (which encompasses my conscious life) the revenue from crowd pleasing hits was relied on.
Maybe it would be different now with the dine-in theatres that serve alcohol but during the time in my life (l990-2010) when I was in the exhibition industry in various capacities, the audience for independent "art" films was somewhat undesirable because they didn't tend to purchase much from the concession stand.
_caleb
Well-Known Member
I did not attack you. I called the content of your post for what it is. Your post was a personal attack on Kareem Daniels, saying that he was promoted because of the color of his skin. It’s possible you didn’t realize that the assumption you made was racist.
Disstevefan1
Well-Known Member
Disstevefan1
Well-Known Member
I think Disney is just hitting the big red mickey shaped pause button on theatrical distribution. Theatrical distribution will return in a couple of years when things are fully back to normal. Right now most theatres are closed, there is no money in theatrical distribution right now.
Ldno
Well-Known Member
i have been seeing mixed answers on this shift though
Slpy3270
Well-Known Member
As I've said before, this restructuring was in the works long before Covid. They just chose a convenient time to execute it.
Ldno
Well-Known Member
**Tinfoil hat in place**. Disney’s decisions as of late are almost prophetic, is like they have *insider* info on world events before they happen... It all started with Bob Iger stepping down in February right before the pandemic shut everything down **tinfoil hat off**
Slpy3270
Well-Known Member
Restructurings normally take months if not a whole year to conceive and implement.
WondersOfLife
Blink, blink. Breathe, breathe. Day in, day out.
Might go away fromAMC/Regal and back to the small, 1-screen local theaters.
Im happy we still have one of those close by in Tryon NC. I love that place.