Disney (DIS) – Activists and Hulu – February 3, 2024
Trian and Nelson Peltz want Disney to partner with Netflix to bundle its planned ESPN streaming service with theirs. I can’t stand this idea. ESPN is a key differentiator for Disney in the increasingly competitive world of streaming. Why share that differentiation with your fiercest competition? What is a better idea? Doing what Disney is already doing and what the other activists involved support. Partner with the NFL to diminish the risk of bidding intensity. Partner with a mega-cap tech firm like Apple to help with distribution and bidding too. That should be the playbook and that is the playbook. The more I hear from Peltz on this one, the more I think he is a Disney distraction. This is just a bad idea. In other Disney news, Hulu is cracking down on password sharing. This represented a strong, multi-year tailwind for Netflix subscriber growth. Hulu doesn’t have the same degree of loyalty with its customer base compared to Netflix’s and will likely deal with more churn from this decision. It still should be a nice revenue driver in 2024 for what’s its most profitable streaming asset.