Disney’s Streaming Strategy: A Bright Future Ahead
Dana Walden, co-chairman of Disney Entertainment, recently illuminated the company’s bright prospects in the streaming arena during a discussion with CNBC’s James Cramer. Amidst the bustling atmosphere of Disney’s upfront event in New York, Walden emphasized the significant growth potential of Disney’s streaming operations, particularly Disney+ and its bundled offerings that include Hulu and ESPN+.
A Growth Business in the Making
“This is a growth business for our company,” Walden confidently declared, shedding light on how Disney+ has made commendable strides towards profitability. After five long years and substantial investments totaling billions, the streaming service is now on the path to achieving those coveted double-digit margins that Wall Street eagerly awaits.
Wall Street Takes Notice
Cramer reacted enthusiastically to Disney’s performance in the first quarter and highlighted the company’s impressive stock trajectory, which has surged for eight consecutive trading sessions. He commended CEO Bob Iger and Walden for their adept leadership of a division that once faced staggering losses.
“You have an amazing breadth. You have fabulous IP, but the fact was, you were in a business that was losing a billion a quarter,” Cramer noted, contrasting Disney’s former struggles with its current upward momentum. “Now it’s the reason why we love Disney, and why the stock won’t quit.”
Balancing Act: Linear and Streaming
Cramer further probed Walden about Wall Street’s perhaps overly negative views on traditional linear TV operations. In response, Walden elucidated how the interplay between linear and streaming can yield a substantial, unduplicated audience for Disney.
“We view our core linear channels—FX, Disney Channel, Nat Geo, and ABC—as an opportunity to program for audiences still watching on linear,” Walden explained. “That same content then seamlessly transitions to streaming, available on demand for our subscribers.” This strategy allows Disney to connect with a diverse audience—half of whom consume content via linear and the other half through streaming, effectively maximizing their distribution strategies.
Exciting Developments Ahead
Walden also unveiled exciting news regarding pricing and launch plans for the upcoming ESPN, set to debut in the fall. This new offering will be available as a standalone streaming channel or as part of the existing Disney+ bundle. “Very soon, you’ll be able to bundle those three services together,” she stated, emphasizing their commitment to an intuitive user experience where all content will be accessible through a single app—Disney+.
Furthermore, Walden highlighted how Disney’s renowned film studio continues to enrich Disney+ with marquee titles, driving subscriber engagement: “The films are amazing. Many of them are billion-dollar performers at the box office—and when they land on Disney+, they stimulate subscriber acquisition.”
Stars Aligning for Success
Cramer couldn’t resist praising Walden further: “Also what’s paying off is that you have brought an attitude. People want to work with you. Stars want to work with you.”
Yet, he also inquired about the persistent valuation gap between Disney and Netflix, whose stocks seem to rise unfazed while Disney has been inching upwards. As of the close of trading on Tuesday, Netflix stood at $1,138.44, while Disney was at $111.38.
Leadership on the Horizon
As the potential successor to Iger looms on the horizon, Walden’s insightful discussion with Cramer only enhances her candidacy. Avoiding a direct comparison between Netflix and Disney, she reaffirmed the company’s vision for the future: “Disney+ is just five years old and thriving. We’re pleased with our growth across all key metrics,” Walden asserted. “Our unique ecosystem allows us to capitalize on iconic stories and characters in many ways, setting us apart from competitors.”
