Disney (DIS) – Insider Buying & Re-Bundling – May 11, 2024
Insider Buying
Board member and former Morgan Stanley CEO James Gorman bought about $2 million worth of Disney stock this week. He’s extremely wealthy, but this is still a small piece of positive news.
Re-Bundling
Disney is fully embracing the bundle for its streaming business. And if you think about it, that makes perfect sense. Streaming is fantastic for boosting advertising impression value thanks to more granular targeting. What isn’t it fantastic with? Aggregated distribution. Disney and others had relied on Comcast and Spectrum to help with distribution and traffic, but that help goes away as the cord is cut. This is how it will plug that hole. A few weeks ago, Disney announced that Fox and Warner Bros. would combine live sports content with ESPN as that service moves to direct-to-consumer over the coming 18 months. Combining that with the rumored NFL/Disney partnership would give these players more muscle to sustainably win live sports rights as mega-caps enter the conversation. Pooling assets like this is a must if Disney isn’t going to sell an ESPN stake to Amazon or Google like I want them to.
This week, Disney took bundling a step further by announcing a Disney+, Hulu, ESPN and Max (owned by Warner Brothers) bundle. More bundling means better retention, lower marketing intensity, higher quality revenue and more content to compete with Netflix’s best-in-class scripted (not live) library. Good decision.
