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FAT PROPHETS: Content is king in the media world and this has been one of the central components to our fondness for The Walt Disney Company (NYSE; DIS, initial buy $48.60) as an investment opportunity. A core cast of some of the most loveable characters for kids has grown leaps and bounds over the decades from in-house development and acquisition. The latest big buy (Lucasfilm) being a case in point, as the building groundswell of buzz for the new Star Wars chapter highlights. Have you got your tickets yet?
Distribution models are changing markedly, that’s for sure, but if you have top-notch content, your position is much enhanced. Disney has this in spades, with arguably the best universe of entertainment in the industry. This gives the company options.
Disney was added to our Global Opportunities Portfolio in the 90s during the August/September correction
Naturally company management is well aware of the evolving landscape and earlier comments from CEO Bob Iger suggest the company will dive into the different models when they make financial sense.
Enter DisneyLife, the company’s new subscription service launched in the UK – a cord-cutters delight. Lucky kids (of all ages) who manage to convince the bill payer of the household that £9.99 is a bargain for a treasure trove of Disney delights will be very happy campers over the holidays.
DisneyLife will give subscribers in the UK all you can eat access to a wide array of Disney content that will continue growing over time. Besides movies, subscribers will get access to thousands of Disney Channel TV episodes, a wide range of music and many classic books from their stable. Content can be downloaded to watch offline for those road trips as well.
While there will be a huge assortment of Disney content, some will be held back – most notably, Marvel and Star Wars content. Nevertheless, given how expensive Disney movies tend to be even multiple years after their debut, there is plenty of value on offer for subscribers here. Multiple family users will be able to use the one subscription (for up to 6 people) and content can be easily consumed on mobile devices or viewed on the big screen.
Disney is naturally reconsidering how it manages the rights to its extensive library of content. Cutting out the middleman could prove very lucrative for Disney, but of course it will be a lengthy process and dependant on various agreements in place lapsing or being renegotiated.
Disney will roll the service out in other European markets going forward and you can bet it will be Stateside and further abroad in the future as well. Message to Mr Iger, what about your fans Down Under?
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