Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

The Walt Disney Company (DIS): This Media Giant Can Do More Than its Peers

Page 1 of 2

As content owners increasingly become power brokers, few companies have the strength of The Walt Disney Company (NYSE:DIS). However, the benefits go well beyond selling valuable content to companies like Netflix, Inc. (NASDAQ:NFLX).

The Walt Disney Company (NYSE:DIS)

Content Power!

The Internet has changed entire industries in a very short period of time. For example, the music industry was nearly destroyed. Now, however, it appears to be getting back on its feet, the most notable recent event being Apple Inc. (NASDAQ:AAPL) signing a lucrative deal with Sony Corporation (ADR) (NYSE:SNE) for access to the media giant’s music library.

Sony was rumored to be the last major hold out to Apple Inc. (NASDAQ:AAPL)’s iTunes Radio service. Holding out, however, allowed Sony to demand, and get, more than twice the normal royalty rate for ads surrounding its content. This shows why hedge fund manager Daniel Loeb wants to see the company split in two to unlock the value of the content business.

Although Sony Corporation (ADR) (NYSE:SNE) shares have jumped lately, the laggard consumer products division is still an issue holding back the shares. With a new version of the PlayStation game console coming out, however, the company could be on the cusp of at least stemming the decline. More aggressive investors interested in content should take a close look at the turnaround potential of Sony shares.


Video, however, is really where the content wars are heating up. Sony has plenty of video and will soon be renegotiating contracts for its content. That adds additional upside potential. However, one of the biggest players in content is Disney.

The Walt Disney Company (NYSE:DIS) not only owns its famous mouse and pals, but it has been bulking up by acquiring key brands like Marvel and Lucasfilm, which owns the Star Wars franchise. Add in ABC, ESPN, and Pixar and Disney looks like the juggernaut of media. Its content is so vital, that Netflix recently inked an exclusive deal with The Walt Disney Company (NYSE:DIS).

That is a huge statement, because Netflix, Inc. (NASDAQ:NFLX) is looking to transition its business model. It wants to become something of an online television station, offering exclusive and desirable content. The Disney deal speaks volumes about both the resolve at Netflix and the value of what The Walt Disney Company (NYSE:DIS) has to offer. In fact, Netflix let a deal with Nickelodeon parent Viacom lapse because it is getting more selective in what it buys.


Content, however, is expensive. While the cost of entering new markets was one of the reasons for a nearly $4 drop in earnings between 2011 and 2012, increasing content costs were also in the mix. With a sky-high price, Netflix is priced for perfection. Investors should be wary of the changing content dynamics, particularly as Netflix looks to create more of its own shows. Conservative types should probably avoid the stock.

Page 1 of 2

Biotech Stock Alert - 20% Guaranteed Return in One Year

Hedge Funds and Insiders Are Piling Into

One of 2015's best hedge funds and two insiders snapped up shares of this medical device stock recently. We believe its transformative and disruptive device will storm the $3+ billion market and help it achieve 500%-1000% gains in 3 years.

Get your FREE REPORT and the details of our 20% return guarantee today.

Subscribe me to Insider Monkey's Free Daily Newsletter
This is a FREE report from Insider Monkey. Credit Card is NOT required.
Loading Comments...

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 102% in 3 years!! Wondering How?

Download a complete edition of our newsletter for free!