But what is the point of beating us down with the valuation if it can’t turn a profit or only breaks even or only makes a little bit? Disney would have been better off licensing their content ($$$) and establishing strategic partnerships with others (Apple) that could have absorbed the costs without the creating the mess of the past half decade.
That's your assumption or prediction. But like the levels of doubt that they would never make their profitability timeframe, I think your projections are still misinformed. We are playing in the realm of speculation though, but Iger and Co are not if anything good at wringing money out of their market share. ARPU incredibly lags what Netflix subscribers are tolerating in droves. There is still a lot more runway for pricing.
Disney would have been ahead licensing perhaps the last couple years, but no longer. All they'd have right now is no service, no 20 billion dollars (and growing) of direct consumer revenue to fine tune. No future growth in the space. Less control about what gets made or ordered. Plus still a rapidly dwindling traditional linear business. What you are not humouring me with is that they've spent the money, but have a 10 figure business to show for it. One that pays for itself and still licenses their content. With Apple or equivalent, they'd have no business, just the licensing fees. Net neutrality is where they are at now.
While DTC breaks even, the licensing fees are still paid out to the studios. There seems to be a lot of difficulty around that conceptualization that they are only making money if the DTC segment itself is making money. But they make money on licensing now AND DTC currently breaks even. Every dollar DTC starts producing moving forward puts them ahead of the pure licensing strategy.
How much did Tubi cost the roll out? If you said less than $600M, then you get a cookie! How much did D+ cost. And don’t forget to count the integration of Hulu in that.
What's more likely. Disney creating billions of operating income out of 20 billion dollar revenue or Tubi creating billions of dollars on 700m. They are not whatsoever the same sized businesses. D+ was expensive to upstart. Hulu established why it was better for them to have done so internally and not merely waited to acquire. As is they are almost 20 billion in the hole on Hulu. Plus a whole lot longer of a lead time. Which is why the slim fraction of D+ start-up was actually quite a good deal to my eyes.
How did they close out that $1.5? I read the quarterlies too. They like to offset a lot of things by raising prices and cutting expenses. That doesn’t seem like a growth strategy to me. But what do I know.
DTC still has not reduced content spend, that is still forthcoming due to the nature of amortization of programming and the delay from strikes. As well as inevitable price increases.
I agree, it is no longer a growth strategy. It's a profitability strategy. Which is one of Bob's few skills. The days of aggressive consumer acquisition and content spend out of whack to do so are over. Disney has their market share.
Experiences are (oddly) their current growth business. In theory. DTC is about to get the old parks red ocean experience.
If you're referring to the metal refillable bottles, you can't fit many of them in a Loungefly.
