We recently published a list of 7 Best Streaming and TV Stocks To Invest In. In this article, we are going to take a look at where Walt Disney Company (NYSE:DIS) stands against other best streaming and TV stocks to invest in.
Consumer Behaviour Around Streaming Choices
Almost all streaming services hiked up their rates and drove subscription prices high in 2023. However, cost is not the biggest factor for consumers while they stream. As of today, the price of streaming services doesn’t affect loyalty to an entertainment provider as it did in the past. Amdocs’ “The New Streamer 2024” report revealed that consumers are expecting improved experiences with rising costs. According to consumers, original content is the top feature that makes a subscription worthy. Other leading factors include access to older titles, new content every few weeks, and being able to watch anywhere.
Trends Shaping the Streaming Industry
Forbes reported that streamers have been victims of long-term challenges related to profitability and subscriber growth. To counter these issues while catering to evolving consumer demands, streamers are opting for ad-supported plans. With almost half of the younger generation open to seeing more ads, this is a potential way to boost revenue.
Streamers are also trying to score exclusive agreements and partnerships with sports leagues as live sports has become a hot commodity in streaming. Simultaneously, the cost of original content comes at reduced profitability. Against this, the potential solution is a consolidation of streaming platforms to allow access to deeper libraries of content for consumers without compromising on their priority of having original content on their plate. Additionally, cloud gaming is being integrated into streaming services considering 70% of Gen Z appears to be interested in it.
On October 18, Ben Silverman, Propagate Content Chairman & Co-CEO, appeared on CNBC giving examples of the aforementioned streaming industry trends. Commenting on the robust Q3 earnings for streaming giant Netflix, he said that its success would lead to more consolidation among the traditional media players in the smaller streamer space. The company is increasingly investing in original content, sports content, and gaming, something that will continue to reward the company as it expands its profits as well as businesses. While it has the money from its streaming business to make those investments back into streaming, many players in the streaming space do not have the same capabilities. Comcast also has the ability to sell a lot of WiFi and has many other businesses that can drive investment in the content business. He mentioned the telecommunications and media firm’s acquisition of NBCUniversal becoming an engine for the whole company. In the views of Silverman, more troubled are the companies that are pure-play so they need to either consolidate to get to scale or be acquired by the bigger players in the future.
Additionally, Silverman emphasized how sports acquisitions are the key drivers to advertising and not just the drivers in the ability to scale an audience at once. For instance, The streaming giant will be live-streaming two of the 2024 season’s NFL games on Christmas Day. Previously in July, NBCUniversal and the NBA announced an 11-year agreement for NBC, Peacock, USA Network, Sky Sports, and Telemundo to present NBA and WNBA regular-season and playoff games starting in the 2025-26 season.
Our Methodology:
In order to compile a list of the 7 best streaming and TV stocks to invest in, we sifted through ETFs, the Yahoo Finance stock screener, the Finviz stock screener, and online rankings to create an initial list of stocks. Moving on, we shortlisted the top 7 stocks from our list which had the highest number of hedge fund holders. The 7 best streaming and TV stocks to invest in have been arranged in ascending order of their hedge fund holders, as of Q2 2024.
At Insider Monkey we are obsessed with the stocks that hedge funds pile into. The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A packed theater of moviegoers watching a blockbuster film produced by the entertainment company.
The Walt Disney Company (NYSE:DIS)
Number of Hedge Fun Holders: 92
The Walt Disney Company (NYSE:DIS) is a leading diversified international family entertainment and media enterprise that includes three core business segments namely Disney Entertainment, ESPN, and Disney Experiences. Disney Entertainment encompasses the firm’s full portfolio of entertainment media and content businesses globally, including streaming. ESPN encompasses ESPN networks, ESPN+, and the firm’s international sports channels while Disney Experiences brings Disney’s stories and characters to life through consumer products, theme parks, cruise and vacation experiences.
Disney has evolved from a cartoon studio in the 1920s to a leading entertainment industry player. As the company builds streaming into a profitable growth business over the long term, the combination of a broad brand portfolio and exceptional content is the key to success. In the most recent quarter, the company achieved profitability across its combined DTC streaming businesses. The firm is improving the quality of its flagship direct-to-consumer streaming service, Disney+. For this purpose, it has taken initiatives like the integration of Hulu content on Disney+ and the introduction of playlists to Disney+ starting on September 4 for US subscribers.
Disney+ offers an extensive collection of exclusive originals including feature-length films, documentaries, live-action and animated series, and short-form content. It serves as the exclusive streaming home for the most recent releases from The Walt Disney Studios and has unprecedented access to Disney’s long history of incredible film and television entertainment. As of March 2024, Disney+ has over 153.8 million subscribers, and over 13,000 shows and movies across more than 150 markets.
For its third quarter ended June 29, 2024, The Walt Disney Company (NYSE:DIS) reported strong double-digit percentage growth of 19% for total segment operating income and 35% for adjusted EPS. Regarding the recent company update, The Walt Disney Company Board of Directors has named James P. Gorman as Chairman of the Board, effective January 2, 2025, who will be succeeding Mark G. Parker. The company also expects to make the critical announcement about the new CEO which is expected in early 2026.
The Walt Disney Company (NYSE:DIS) has an unrivaled and solid portfolio, a strength which has been evident in the firm’s success as well as results. As of Q2, the stock is held by 92 hedge funds.
Overall, DIS ranks 2nd on our list of best streaming and TV stocks to invest in. While we acknowledge the potential of DIS as an investment, our conviction lies in the belief that some deeply undervalued AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for a deeply undervalued AI stock that is more promising than DIS but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
