here's how the company did compared to what wall street expected:

• eps: $1.58 vs. $1.55 expected, according to thomson reuters
• revenue: $14.24 billion vs. $14.42 billion expected, according to thomson reuters

Disney will pull its movies from Netflix and start its own streaming services

• Disney announced during its latest earnings report it intends to pull all its movies from Netflix
• It also will launch an ESPN video streaming service in early 2018, including MLB, NHL and MLS content
• There's also plans to launch a branded Disney direct to consumer streaming service in 2019

Here's what Disney reported as operating income for each segment, compared with analysts' expectations, according to StreetAccount consensus estimates:

Media and networks: $1.84 billion vs. $1.99 billion expected -- miss
Parks and resorts: $1.17 billion vs. $1.09 billion expected -- beat
Studio: $639 million vs. $636.6 million expected -- beat
Consumer and interactive: $362 million vs. $394.6 million expected -- miss

Disney will price streaming service at $5 per month, analyst says

Aug. 21, 2017

Disney’s upcoming branded streaming service will likely be priced around $5 per month in order to drive wider adoption, according to MoffettNathanson analyst Michael Nathanson.

Nathanson said that the new Disney streaming service and the upcoming ESPN streaming service need a clear distinction. The ESPN service will likely test different prices as it prepares ESPN to be ready to go fully over-the-top, according to the report, but the Disney service is about building asset value instead of taking licensing money from SVOD deals.

“As we’ve pointed out in all of our work on vMVPDs, pricing matters and consumers have signaled that internet-delivered services should be priced materially below traditional products to drive broader adoption. Disney’s pricing strategy will be a key gating factor in determining the rates of adoption. If there are truly complementary services, it would be logical to offer a lower price point to consumers to denote the ‘add-on’ intention of Disney vs. a higher price point, would could signal a replacement option,” wrote Nathanson.

At $5 per month in ARPU, Nathanson sees revenues from the Disney streaming service ranging from $34 million to $38 million in the first year and more than $230 million by year three.

But with the loss of Netflix licensing revenues and accelerated marketing costs for launching the new service, Nathanson predicted Disney’s losses will increase by about $200 million to $425 million per year.

“We expect the loss to ramp in FY 2020 with the first full year of lost Netflix Pay 1 revenues negatively impacting Disney plus higher marketing costs leading to a net after tax loss of $280 million. Similarly, we expect the investment costs to increase in FY 2021 offset by higher OTT revenues leading to after tax loss of $260 million.”

Disney's profit warning drags down media stocks

Sep. 7, 2017

Walt Disney Co Chief Executive Bob Iger said on Thursday the company’s earnings per share for this year will roughly be in line with a year ago, dragging down shares of media stocks.

Disney earned $5.72 per share in fiscal 2016. Analysts are expecting the company to earn $5.88 this year, according to Thomson Reuters I/B/E/S.

Shares of the company fell nearly 3 percent to a 10-month low, dragging down CBS Corp and Twenty-First Century Fox Inc, 3 percent and 4 percent, respectively.

Media companies are struggling as viewers migrate to streaming options offered by Netflix Inc, leaving behind traditional pay-TV packages.

Disney to Include Star Wars, Marvel on New Streaming Service

Media giant has seen ‘some impact already’ from Hurricane Irma on its theme park and cruise line

Sept. 7, 2017

Walt Disney Co. intends to offer its Marvel and Star Wars properties through the subscription video service it is planning to launch in 2019, rather than renewing a deal with Netflix Inc., according to Chief Executive Robert Iger.

Disney announced last month it would launch its own on-demand service in late 2019, and where it would offer animated and live-action family films that currently stream on Netflix after they run in theaters and are sold on DVD and in digital stores like Apple Inc.’s iTunes. However, Mr. Iger said at the time Disney wasn’t certain if it would include Marvel and Star Wars movies on its own service or it would continue to license them to Netflix.

In deciding to retain the rights to two of its biggest franchises, including superhero movies like “Avengers” and the annual “Star Wars” sequels and spinoffs, Disney is giving up tens of millions of dollars per movie it currently receives from Netflix. However, it will bolster the amount of premium content available on its own digital service and thus, Mr. Iger is betting, its appeal to consumers.

“We’re going to launch big and we’re going to launch hot,” Mr. Iger said of the digital service, speaking at a media-business conference on Thursday.

For Netflix, Disney’s decision will add to the pressure for it to create appealing original content of its own in order to replace some of the high-profile franchise films it will lose starting in 2019.

A Netflix spokesman declined to comment.

In addition to all of the movies Disney produces for theaters, typically around 10 a year, the company will produce four or five lower-budget movies exclusively for its new digital service, Mr. Iger said at the investor conference organized by Bank of America Corp.

It will also make four or five original series and three or four “television movies” of the type that currently run on its Disney Channel, Mr. Iger added.

The service will launch in the U.S. in late 2019 as movies that previously would have been on Netflix become available, Mr. Iger said, though it could launch earlier in other countries.

Disney is just beginning work on the digital service, which will be offered directly to consumers over the internet, and has yet to announce how it will be priced. Mr. Iger said the company will share details on how much it will spend on the service later.

As a part of the strategy, however, Disney last month said it would spend $1.58 billion to acquire majority control of streaming technology company BAMTech.

Disney will also next year launch a direct-to-consumer ESPN sports service. Mr. Iger announced no significant new details about it Thursday, reiterating that it will include about 10,000 annual events in sports such as baseball and hockey that currently don’t run on live television, and that it will act as a hub allowing fans to subscribe to other specific sports leagues or events.

Successfully launching the new digital services is one of Mr. Iger’s two top priorities in the remaining two years before his planned retirement in 2019, he said, along with lining up a successor for his own job.

Mr. Iger also said Thursday that Disney is feeling some financial impact from Hurricane Irma. The company has canceled three cruise itineraries and shortened others, he said, and some tourists are canceling previously planned trips to Walt Disney World in Orlando, Fla.

Cord-Cutters Sap AT&T’s TV Business

Oct. 12, 2017

Concern grew Thursday that cord-cutting is putting heavy pressure on television distributors and channel owners after AT&T Inc. disclosed that its losses of traditional-TV customers worsened in the latest quarter.

The disclosure weighed on shares of the telecom giant, which owns DirecTV and is the biggest U.S. provider of pay-TV services, as well as other media players. Shares of AT&T and satellite rival Dish Network Corp. shed 6% and 5%, respectively, in Thursday’s session. The two biggest cable-TV providers, Comcast Corp. and Charter Communications Inc., also retreated. The selloff erased more than $24 billion in market value.

AT&T said in a securities filing late Wednesday that its video-subscriber base declined by about 90,000 customers in the third quarter as customers abandoned its fiber-optic-video and satellite-TV services. The decline, its third quarterly drop in a row, came despite nearly 300,000 new accounts on its DirecTV Now service, which streams channels over the internet.

The report means AT&T lost more satellite and U-verse fiber-optic customers than it gained through DirecTV online, a sign cord-cutters threaten a broad array of companies that have until recently counted on traditional TV bundles for profit growth.

Cable giant Comcast last month said it also expects to lose subscribers in the third quarter, partly because of cord-cutting customers swapping cable subscriptions for more affordable online substitutes. Traditional pay-TV services tend to be more profitable for providers than streaming substitutes. Comcast shares fell 3.9%, while Charter Communications fell 2.6%.

Shares of media companies also fell. AMC Networks Inc. lost 6.8%, Viacom Inc. declined 2.5% and Walt Disney Co. slid 1.6% on Thursday after Guggenheim Securities analyst Michael Morris downgraded the stocks. “We expect pressure on subscriber trends and audience size to continue for the foreseeable future” across the entire sector, he wrote.

Content providers, like AMC, Viacom and Disney, built their TV businesses off the fees from big bundles of channels, and a decline in traditional pay-TV subscribers means less money for channel owners, which are typically paid per subscriber.

In a sign that it is getting tougher for smaller cable channel owners, Viacom’s fee negotiations with Charter Communications have stalled—despite the fact that it has already offered a price the company says would lower subscribers’ bills. The standoff is in part because of declining ratings and what MoffettNathanson analyst Craig Moffett called the “ravages of cord-cutting.”

AT&T also tied the decline to “heightened competition in traditional pay TV markets and over-the-top services” as well as “stricter credit standards.” AT&T had 25.2 million video subscribers at the end of the second quarter.

AT&T is looking to expand its entertainment business with a proposed takeover of Time Warner Inc., which would add HBO, cable channels like CNN and the Warner Bros. film studio. The transaction, worth about $85 billion when it was announced last October, is being reviewed by Justice Department antitrust officials.

Disney CEO Bob Iger says he’s stepping down in 2019, and this time he means it

Oct 4, 2017

Walt Disney Co. Chief Executive Bob Iger is finally planning his exit from the company.

Speaking at Vanity Fair’s New Establishment Summit on Tuesday, Iger said that he plans to actually step down as CEO of Disney in mid 2019.

“This time I mean it,” Iger said during the summit. “It’s time.”

Earlier this year Disney’s board of directors extended Iger’s contract through July 2, 2019. That move came after the man widely expected to succeed him, former Chief Operating Officer Tom Skaggs, left the company after it became clear he would not get the job.

Iger had planned to step down in 2018, but only after an earlier planned exit in 2016 was pushed back. It’s unclear if the company has a suitable internal candidate as successor or will have to look outside.

Disney to cut staff at ABC TV Group by as many as 200 people

Oct 12, 2017

Walt Disney Co.’s ABC TV Group will lay off as many as 200 employees, according to sources at the media and entertainment company.

The division, tasked with looking at areas to trim roughly 10% of its annual costs, will part ways with somewhere between 100-200 employees. Sources say the largest cuts will come from non-content and operational functions.

The layoffs will impact all of the division’s teams: ABC Entertainment, ABC Studios, Disney Channel, Disney XD, Disney Junior and Freeform.

Sources say Disney/ABC TV Group is shifting its resources to address the company’s future business needs, something all of Disney’s divisions are tasked with keeping a close eye on.

Disney Lays Down the Law for Theaters on ‘Star Wars: The Last Jedi’

Exhibitors say the studio’s top-secret terms are the most onerous they have ever seen

Nov. 1, 2017

The box-office domination of the “Star Wars” franchise has given Walt Disney Co. unprecedented power over the nation’s movie theaters.

Before exhibitors can begin screening “Star Wars: The Last Jedi” this December, they must first commit to a set of top-secret terms that numerous theater owners say are the most onerous they’ve ever seen. Disney will receive about 65% of ticket-sales revenue from the film, a new benchmark for a Hollywood studio. Disney is also requiring theaters to show the movie in their largest auditorium for at least four weeks.

Ignoring the terms carries an unusual penalty. If a theater violates any condition of the distribution agreement, Disney can charge it an additional 5%, bringing the studio’s total haul to 70% of sales on a movie likely to gross more than $500 million at the domestic box office.

The case of “The Last Jedi” highlights a perpetual but growing tension between the business partners who bring movies to the public: studios and theaters. Negotiations between the two parties have grown pitched as Disney has become one of the most powerful studios in Hollywood and theaters have lost leverage as box-office sales fall. Box-office revenue is down 5% so far this year.

The depressed box office is accelerating plans at other studios to shorten the theatrical window, so movies would be available to watch at home sooner. But Disney has said it wants to preserve the theatrical model as it currently stands, making the studio an even more indispensable supplier for exhibitors over the long term.

That dynamic has exhibitors across the country resigning themselves to a new condition of doing business: If you want to play Disney’s blockbuster movies, get used to Disney’s rules.

“They’re in the most powerful position any studio has ever been in, maybe since MGM in the 1930s,” said one film buyer.

The studio’s slate of surefire hits this year has included “Beauty and the Beast” and “Guardians of the Galaxy Vol. 2,” with “Thor: Ragnarok” coming this weekend.

Last year, with just 13 new releases, Disney had a 26% market share in total domestic box office, according to Box Office Mojo. The No. 2 studio, Time Warner Inc.’s Warner Bros., had a 17% market share with 23 movies. Disney is expected to top the market-share ranking this year, too.

Disney’s string of hits in recent years -- fueled by its acquisition of Marvel Entertainment in 2009 and Lucasfilm in 2012 -- gives it sway over theater owners, many of whom described the studio as exercising more control over every detail of a film’s release than any of its rivals.

Few operators can afford to turn away a Disney windfall. But some independent theaters have decided not to screen “Last Jedi” when it’s released, saying the company’s disproportionate share of ticket sales and four-week hold make little economic sense -- especially in small towns.

“There’s a finite number of moviegoers in my market, and I can service all of them in a couple of weeks,” said Lee Akin, who operates a single-screen theater in Elkader, Iowa (population: 1,213).

Toward the end of a month long run, Mr. Akin said he would be unable to swap in more popular titles and instead have to play “Last Jedi” to near-empty auditoriums -- while still giving Disney 65% of those paltry sales. The studio is applying the 65% split across all weeks of the film’s release, rather than some studios’ practice of beginning a split at a high figure and then lowering it in subsequent weeks.

Most theatrical releases send about 55% of ticket sales back to studios, though the average split is about 60% on major hits. Hollywood makes more money on tickets sold in the U.S. than in overseas markets, where the split averages about 40%. Disney has deals with some exhibitors that give it less than 65% on “Last Jedi.”

Disney’s 5% penalty for not meeting terms on “Last Jedi” is unusual. The charge will be implemented for various violations, including if a theater pulls even one “Star Wars” screening from its schedule or begins marketing the movie before Disney gives the OK, according to theater operators.

The four-week hold in a theater’s largest auditorium, meanwhile, has frustrated distribution executives at rival studios that also have major releases hitting theaters around Christmastime. Soon after the “Last Jedi” opens on Dec. 15, movies such as Sony Pictures Entertainment Inc.’s “Jumanji: Welcome to the Jungle” and Twentieth Century Fox’s “The Greatest Showman” will begin jockeying for screen times.

Of course, most exhibitors make more money on concession sales than box office, and a theater receiving 35% of ticket sales on a hit that grosses $700 million is in better shape than one receiving 50% on a $200 million movie.

Disney’s terms on “Last Jedi” kick in if the movie collects more than $500 million in the U.S. and Canada, which box-office prognosticators say is a near certainty. The studio’s first installment of the space opera, “The Force Awakens,” opened in December 2015 to $248 million and became the highest-grossing domestic movie of all time, collecting $937 million in 2015. “The Last Jedi,” which has Mark Hamill returning as Luke Skywalker, is expected to draw gargantuan crowds.

Exhibition executives have already promised impatient investors the movie would help balance out a summer full of duds. Adam Aron, chief executive of No. 1 exhibitor AMC Entertainment Holdings Inc., called “Last Jedi” a “gift from heaven” earlier this year.

Disney’s terms have annoyed theater owners before. In May 2015, a trade group representing theater owners took the rare step of sending Disney a letter outlining “an avalanche of complaints, concerns and fears” from its members over conditions imposed on theaters that wanted to show the studio’s “Avengers: Age of Ultron.”

On the “Avengers” movie, Disney tried to limit matinee discounts and issued a rule stating theaters must use a national-average ticket price when calculating the box-office split. Disney retreated from both rules following the trade group’s letter.

Disney earnings: It’s a transition period for the media and entertainment company

Nov. 3, 2017

Walt Disney Co. has needed an answer for ESPN for some time.

The company laid out plans last quarter to launch a direct-to-consumer streaming service from ESPN in hopes of combating the damage suffered from cord-cutting.

Analysts have argued whether the move is too late, and whether it will be enough to curtail the network’s subscriber exodus, but RBC Capital Markets analyst Steven Cahall said Disney is transitioning the company to be better positioned for the future.

Cahall said he expects Disney’s earnings contributions from ESPN to be less than 20% by 2020. He said many investors believe ESPN is between 40% and 50% of Disney’s earnings.

As ESPN continues to suffer from subscribers ditching the network and traditional cable offerings, the company is also reportedly facing more staffing cuts.

Outside of ESPN, Disney’s ABC-TV Group recently said it plans to lay off as many as 200 people.

Cahall, however, sees Disney’s intellectual property at its TV and film studios playing a bigger role, driving Disney’s earnings along with the theme parks division and the future Disney streaming service.

Investors might have to wait a few years to truly measure the success of Disney’s strategy going forward, Cahall said. Meanwhile, Disney will all need to shift focus to transitioning away from Chief Executive Bob Iger.

Iger said at a conference in October that he plans to step down in 2019. The Disney chief has had his tenure extended by the board at least twice as the company has struggled to secure a successful succession plan.

Earnings: Disney is expected to report earnings of $1.15 per share, according to analysts tracked by FactSet. That would be an increase of 5.5% compared with same period a year ago, but a 26.6% decline from the media and entertainment company’s most recent fiscal third quarter. Disney has surpassed FactSet’s per-share earnings expectations in eight of the last 10 quarter.

Estimize, which crowdsources estimates from sell-side and buy-side analysts, hedge-fund managers, executives, academics and others, expects Disney to report earnings of $1.21 per share.

Revenue: Analysts expect Disney to report revenue of $13.30 billion, according to FactSet. That would be an increase of just 1.5% compared with the year-earlier period, but a decline of 6.3% compared with the third-quarter revenue. Disney has missed FactSet forecast on revenue in seven of the last 10 quarters. Estimize contributors on average expect revenue to come in at $13.27 billion.

Disney’s media networks, which include cable and broadcast properties, are expected to bring in $5.69 billion, with the majority of that coming from cable networks. Disney’s theme parks and resorts are expected to contribute $4.60 billion, while its film division is expected to add $1.58 billion and consumer products $1.38 billion.

Future of Disney’s Struggling TV Business Rests on Its Streaming Plans

Nov. 4, 2017 7:00 a.m. ET

Investors’ biggest question about the future of Walt Disney Co. continues to be whether and how it will turn around its struggling television business.

Chief Executive Robert Iger’s answer, new streaming services aimed directly at consumers, will likely once again be a primary focus of its earnings report Thursday.

His decision to launch an entertainment streaming service in 2019 will mark a revolution in the way the media company makes and spends money and in its relationship with consumers. Instead of licensing all the content it produces to other distributors, be they movie theaters, cable systems, or online hubs like Netflix, Disney will start selling the content it produces directly to consumers, with no intermediaries.

The move is necessary, insiders say, because Disney’s TV business has turned from growth engine to albatross, due in part to the rise of streaming giants like Netflix Inc. and Amazon.com Inc. Profits in Disney’s television unit, its largest, are down 11% this year. Television generated $6.1 billion of profit in the first nine months of Disney’s fiscal year, 48% of its total. In 2014, it was 56%. In 2012, it was 66%.

Despite impressive growth in film, theme parks and consumer products, Disney stock has fallen 17% in the past two years, largely over anxiety about the future of TV.

Mr. Iger laid out plans for the streaming service in August to try to allay Wall Street’s concerns. But his announcement raised new worries about whether the company can effectively execute. Its shares have fallen 8% since then.

Cord cutting hits 632K for Q3 with bulk of top platforms reporting

Oct. 27, 2017

With five out of the top seven publicly traded linear pay TV platforms, including the top three, reporting customer numbers, it appears the industry’s record-bad third-quarter subscriber losses could indeed surpass 1 million users, as some analysts have predicted.

In the past week, Verizon said it lost 18,000 Fios TV users in Q3. AT&T then reported losses of 251,000 for DirecTV and 134,000 for U-verse; on Thursday, Comcast and Charter posted TV customer losses of 125,000 and 104,000, respectively.

During the third quarter of 2016, these same companies added a modest 29,000 video users—or 354,000, discounting AT&T’s planned obsolescence for its U-verse IPTV service.

Still to report: Altice USA and Dish Network, neither of which have specified an earnings date. Dish is believed to once again have big losses to talk about. Privately held Cox Communications, the third largest U.S. cable operator, also has to be factored into the mix.

Two weeks ago, UBS analyst John Hodulik predicted that cable, satellite and telco operators would collectively lose more than 1 million customers in Q3 across their linear platforms. Analysts had predicted the same thing for the second quarter, which is usually the worst three-month period for operators in terms of subscriber growth.

The market fell just short of the inauspicious metric in Q2, losing 978,000 linear customers, according to SNL Kagan.

But with hurricane disruption compounding the mass customer migration of U.S. consumers to OTT services, Q3 looks poised to generate big, hyperbolic headlines about cord-cutting in the coming weeks.

Linear pay-TV business has grown to a customer shrinkage rate of around 3.4% from 1.4% a year ago, when AT&T made its bid for Time Warner Inc.

21st Century Fox has been holding talks to sell most of the company to Disney: Sources

Published 55 Mins Ago

21st Century Fox has been holding talks to sell most of the company to Walt Disney Co., leaving behind a media company tightly focused on news and sports, according to people familiar with the situation.

The talks have taken place over the last few weeks and there is no certainty they will lead to a deal. The two sides are not currently talking at this very moment, but given the on again, off again nature of the talks, they could be revisited.

For Fox, the willingness to engage in sale talks with Disney stems from a growing belief among its senior management that scale in media is of immediate importance and there is not a path to gain that scale in entertainment through acquisition. The company is said to believe that a more tightly focused group of properties around news and sports could compete more effectively in the current marketplace.

The media landscape has changed considerably in recent years with giants such as Facebook, Google (Alphabet), Amazon and Netflix changing the way people consume media and dominating the digital distribution of digital video content. Being able to compete in that changing landscape, many people believe, requires scale that a Disney has, but 21st Century Fox does not.

For Disney, the opportunity to take control of another movie studio and significant TV production assets as it readies a direct-to-consumer entertainment streaming offering is attractive as is Fox's significant exposure to international markets, such as the U.K., Germany and Italy — both through its networks and 39 percent ownership of Sky. Disney recently announced it will pull all of its movies from the Netflix platform and will establish two direct-to-consumer offerings: one for sports and one including its key franchises such as "Star Wars" and Marvel.

Disney would not purchase all of Fox, according to people with knowledge of the talks.

The company could not own two broadcast networks and would therefore not buy the Fox broadcast network. It would not buy Fox's sports programming assets in the belief that combining them with ESPN could be seen as anti-competitive from an antitrust standpoint and it would not buy the Fox News or Business channel. Disney would also not purchase Fox's local broadcasting affiliates, according to people familiar with the negotiations.

In addition to the movie studio, TV production and international assets such as Star and Sky, Disney would also add entertainment networks such as FX and National Geographic.

The contemplated structure of the deal or the price that has been discussed could not be learned. Given it would involve the sale of many, but not all of Fox's properties, it's unclear how Fox would mitigate potential tax consequences of a deal.

Officials at Disney and Fox declined to comment.

Disney’s Hulu play could turn out to be like Facebook buying Instagram

• Disney's reportedly considering buying assets from 21st Century Fox, including its stake in streaming video service Hulu.
• Owning a majority stake in Hulu prepares Disney perfectly to be one of the big players in over-the-top video.
• It's equivalent to Facebook buying Instagram to help it stay atop the App Store charts.

Nov. 8, 2017

Monday's jolting news broken by CNBC's David Faber that Disney had held discussions with 21st Century Fox about buying up many of Fox's most interesting cable and movie assets is still reverberating around the media world.

Laura Martin of Needham said on CNBC after the news broke that the deal is a "dream come true" for Disney. And she's right. If it happens, Disney would get the valuable TV and film production business and IP (including Avatar, X Men and Ice Age), the FX and Nat Geo cable channels, very interesting international assets, and likely Fox's stake in Vice Media. All of these assets -- as well as FX executive John Landgraf -- would be extremely helpful to Disney in filling out content for its over-the-top digital entertainment offering planned for 2019.

The report also says Disney is seeking to get Fox's stake in Hulu. To me, this is perhaps the most intriguing aspect of the possible deal from a Disney perspective. It also hasn't gotten much attention yet.

Disney is already a 30% owner of Hulu. If it got Fox's 30% stake, it would move to a 60% control owner, along with Comcast at 30% and Time Warner at 10%.

Such a move would allow Disney to consolidate Hulu's financial results.

Hulu hasn't gotten nearly as much attention as Netflix over the past few years. The critical acclaim and Emmys for The Handmaid's Tale put it in the spotlight in recent months, but it's still not discussed on the same level as Amazon's Prime Video, Netflix, Apple and other potential over-the-top (OTT) video entrants.

Why not?

Hulu is expected to reach 32 million subscribers later this year. That's less than Netflix's 128 million and Amazon's 85 million, but it is still formidable and ahead of everyone else who wants to launch an OTT network.

Consider this: Ben Swinburne of Morgan Stanley recently predicted that Disney's planned entertainment OTT service, set to launch in 2019, could achieve 30 million subs by 2028.

Hulu's at that level today.

Hulu was founded in March 2007. Achieving scale takes time. Everyone who thinks it's a great idea to launch an OTT channel today might have a tough 10 years ahead of them.

How many "must have" OTT channels will each of us subscribe to in the future? Netflix, Apple (whenever they launch something), Amazon, Hulu and Disney all seem like likely choices. How many others?

Look at the app economy for comparison. On the top of the App Store charts today, it's basically Facebook (with Messenger, Instagram and WhatsApp), Google and Snapchat. It seems like there also be a finite choice of OTT channels as well.

Becoming a majority owner of Hulu today might end up like being the majority owner of Instagram in 2014.

There's another attractive reason for Disney to want to gain majority control of Hulu. As I argued in June, Hulu would likely grow faster with a simpler corporate structure and a majority owner. For example, the clear leadership could help them push Hulu much more aggressively internationally, as well as streamline content decisions.

It would also help to clear up the identity of Hulu versus a yet-to-launch Disney Entertainment OTT channel. Hulu could skew more adult with Handmaid's Tale, Family Guy, Simpsons, Fox films and FX-type content (under John Landgraf perhaps). Disney could keep Lucasfilm, Pixar, Marvel, and other Disney Channel type content.

Also, as Hulu would still be partly owned by Comcast and Time Warner, it could continue to shine a spotlight on other interesting content beyond Disney.

Hulu doesn't have to catch Netflix to be a success. If it stays in the Top 5 of OTT channels in the future, the way Instagram has stayed in the Top 5 on the App Store since Facebook bought it, it would be a home run for Disney.

The Walt Disney Company shares fell after the company reported quarterly earnings and revenue that missed analysts' expectations on Thursday.

Operating income for most of Disney's businesses declined year over year. Media networks, the company's biggest segment, saw that figure decline 12 percent year over year.

Here's what each segment reported in operating income compared to StreetAccount consensus estimates:

• Media and networks: $1.48 billion, vs. $1.58 billion -- miss
• Parks and resorts: $746 million, vs. $735.1 million -- beat
• Studio: $218 million, vs. $364.4 million -- miss
• Consumer and interactive: $373 million, vs. $470.4 million -- miss

ESPN will lay off more than 100 staffers after Thanksgiving

Nov. 9, 2017

Another round of layoffs is hitting ESPN, CNBC has learned.

ESPN plans to layoff more than 100 staffers after the Thanksgiving holidays, with SportsCenter in particular expected to lose jobs a source close to the situation told CNBC. The news was first reported by Sports Illustrated.

ESPN declined to comment.

The company has gone through several rounds of layoffs over the past few years. In April it let 100 people go, including about 10 percent of ESPN's more front-facing employees including on-air talent and writers.

Star Wars is getting an all-new trilogy from Rian Johnson

Nov. 9, 2017

Expectations are high for Star Wars: The Last Jedi, and it appears Disney and Lucasfilm are happy with the way the film turned out: today, Disney announced that its director, Rian Johnson, will be launching an entirely new trilogy in the Star Wars franchise.

Johnson will write and direct the first installment in the new trilogy, with his longtime producer Ram Bergman set to produce the films. While details are scarce, the new trilogy will be separate from the classic Skywalker saga, and instead will focus on “new characters from a corner of the galaxy that Star Wars lore has never before explored.”

Disney Re-Engages in Talks to Buy 21st Century Fox Assets

Dec. 2, 2017

Walt Disney Co. has re-engaged in discussions with 21st Century Fox to purchase some of the media giant’s assets, and Comcast Corp. remains in the mix, with deal talks gaining momentum, according to people familiar with the situation.

The talks center on the Twentieth Century Fox movie and TV studio, international assets such as Fox’s 39% holding in U.K. satellite TV provider Sky PLC and India’s Star TV, along with some U.S. cable networks. Fox News, the Fox broadcast network and sports network FS1 aren’t expected to be sold in any transaction, the people said.

Rupert Murdoch and his family, who hold 39% of 21st Century Fox’s voting shares, expect to make a decision by year’s end on whether to pursue a transaction, the people said.

Disney first reached out to 21st Century Fox about a possible deal several weeks ago, but the talks cooled after the two sides couldn’t agree on price, among other issues, people familiar with the matter have said.

Once news of those initial talks surfaced, other potential acquirers began emerging. Comcast, Sony Corp.’s entertainment unit, and Verizon Communications Inc., are among firms that have expressed various levels of interest, the people familiar with the situation say. The extent of discussions with Sony and Verizon is unclear. A top Verizon executive last week played down the need for the company to do a big content acquisition.

Disney and Comcast are in active talks with 21st Century Fox. It is possible the talks could fall through and a deal won’t be reached.

The assets in play would give a buyer exposure to growth in international markets as the U.S. pay-TV industry reaches maturity.

With the Twentieth Century Fox studio, they would also get a premier Hollywood content factory and strengthen their position as media consumption shifts to digital platforms.

Also on the table in some of the discussions is Fox’s 30% stake in streaming service Hulu. Disney and Comcast each also own 30% of the company, so they could consolidate control by buying out Fox’s stake. Fox’s regional sports networks could also be sold off, the people familiar with the situation say.

Robert Iger Likely to Extend Tenure as Disney CEO Past 2019

Dec. 6, 2017

Walt Disney Co.’s possible purchase of the entertainment assets of 21st Century Fox Inc. could mean more time for Robert Iger as chief executive of Disney.

With the biggest acquisition in his company’s history looming, Mr. Iger’s tenure as Disney’s CEO is likely to be extended yet again, said people close to the entertainment giant.

Disney is in negotiations to acquire assets of 21st Century Fox valued at around $40 billion.

The deal that could be announced as soon as late next week, people with knowledge of the talks said.

Disney to Acquire Key Parts of 21st Century Fox for $52.4 Billion

Disney will also assume approximately $13.7 billion of net debt of 21st Century Fox.

Dec. 14, 2017 7:13 a.m. ET

*Disney to Acquire 21st Century Fox

*Disney to Acquire 21st Century Fox for About $52.4 Billion in Stock

*Walt Disney to to Acquire 21st Century Fox After Spinoff of Certain Businesses

*21st Century Fox to Spin Off Fox Broadcasting Network and Stations, Fox News, Fox Business, FS1, FS2 and Big Ten Network to Hldrs

*Disney: Acquisition Includes 21st Century Fox’s Film and Television Studios, Cable Entertainment Networks and Intl TV Businesses >DIS

*Disney: Robert Iger to Remain Chairman, CEO Through 2021 >DIS

*Disney to Issue 0.2745 Shares For Each 21st Century Fox Share >DIS

(More to Come)

Most of the assets Disney is buying would be put to use in Chief Executive Robert Iger’s quest to transform his company into a streaming-video giant that can go head-to-head with rivals such as Netflix Inc. He wants Disney to have its own relationships with consumers and a broad array of content to offer them online.

Mr. Iger also wants to strengthen Disney’s largest business, television, which has taken a hit as consumers cut back on traditional cable packages and spend more time with digital providers.

The deal would mark a significant turn for Rupert Murdoch’s media empire after decades of expansion that created a titan in the entertainment industry. The remaining Fox assets, which would be spun off as part of the transaction, would include the Fox News cable channel, the Fox broadcast network and the Fox Sports 1 sports channel. Fox also will retain real estate including its studio lot in Los Angeles, people familiar with the situation say.

Mr. Murdoch has contemplated eventually merging the remaining Fox assets with News Corp, parent of The Wall Street Journal, people familiar with the matter say. The Murdoch family owns 39% voting stakes in both companies. Such a merger is unlikely in the near term given complexities including how to manage the potential tax bill, the people say.

21st Century Fox had other suitors for its assets, including cable giant Comcast Corp. One reason it leaned toward Disney was the perception that the deal wouldn’t face as much antitrust scrutiny, a person familiar with the matter said.

The Justice Department has sued to block AT&T Inc.’s attempt to purchase Time Warner Inc., signaling that a deal in which a major content distributor, such as Comcast, is buying a big content company could be heavily scrutinized.

The Disney-Fox deal raises the prospect of a future in which media is dominated by a few giants: Comcast-owned NBCUniversal, a combined Disney-Fox, and—if it survives the legal battle with the government—AT&T. A group of smaller companies, including CBS Corp., Viacom Inc., Sony Pictures Entertainment and Lions Gate Entertainment Corp., could look to do their own deals to gain more scale and leverage in the industry.

Media companies like Disney and Fox are increasingly concerned that the biggest competitive threats in the future won’t come from rival media conglomerates, but rather from technology companies. Netflix and Amazon.com Inc. are building substantial subscription businesses by reaching consumers directly and are investing huge sums in original programming. Meanwhile, Facebook and Google are winning an overwhelming share of digital advertising dollars.

The growth of Netflix and Amazon, in particular, has changed the equation for Mr. Iger. Since becoming CEO in 2005, he has made Disney the most successful collection of brands in Hollywood due in large part to the $7.4 billion purchase of Pixar Animation Studios and subsequent deals for Marvel Entertainment and Lucasfilm Ltd., the maker of “Star Wars.”

The popular franchises Disney gained in those deals have made it the envy of other entertainment companies and have driven substantial growth in its theme parks and consumer-products divisions.

Disney’s television business has faced struggles. It generated two-thirds of the company’s operating income in fiscal 2012 but has fallen rapidly to less than 47%. Cord-cutting and falling ratings for traditional TV networks have battered that business, pressuring Disney’s stock price.

To address that challenge, Mr. Iger in August announced Disney is making direct-to-consumer streaming services its top priority. The company is launching one called ESPN Plus, meant to supplement its cable sports giant’s TV offerings, in 2018. The following year, Disney plans to launch a family entertainment service that will include most of its movies and television shows, many of which it currently sells to Netflix in a deal that will expire next year.

Disney also spent nearly $2.6 billion for majority control of streaming technology BamTech, which is powering its new digital services.

The Fox acquisition is an acknowledgment by Mr. Iger that Disney will need more help to seize control of the digital moment. With Fox, his company will gain more power to compete against Netflix and other digital giants and a larger, more-diverse collection of content to offer on streaming platforms.

Buying Fox also would further augment Disney’s collection of franchises. It would gain “Avatar,” which is already represented in the Walt Disney World theme park in Florida under a licensing deal, and Marvel’s X-Men superheroes, to which Fox has had big-screen rights since the 1990s.

Disney would get majority control of Hulu as well, giving it another streaming service to complement the one it is launching in 2019.

A purchase of Fox also would help Disney strengthen its existing television business. Fox’s Twentieth Century Fox Television is one of the industry’s most prolific producers with successful shows on every major broadcast network. Its hits include NBC’s “This Is Us” and ABC’s “Modern Family.”

Disney also will get Fox’s biggest television asset—the animated hit “The Simpsons.”which has generated billions in revenue for the company

The addition of 22 regional sports networks will make Disney an even more-potent force in sports programming and potentially give it more leverage in negotiating distribution deals with cable and satellite operators. ESPN will also now be able to use Fox’s regional sports network as a promotional platform.

Acquiring Fox’s 39% stake in the European broadcaster Sky will give Disney a much needed footprint in key regions including the U.K., Italy and Germany. Fox has a deal being reviewed by regulators to acquire the 61% of Sky it doesn’t own.

Fox’s Star India is one of the fastest-growing programmers with revenue of $1.3 billion, up from $570 million in 2010. Its earnings before interest, taxes, depreciation and amortization are projected to grow from $230 million in the most-recent fiscal year to $1 billion by 2020.

Mr. Iger was previously scheduled to retire from Disney in July of 2019, but as part of this deal he will stay longer to help integrate the assets, people close to the negotiations have said.

Disney shares see a bump after being upgraded to outperform at Macquarie Research

Jan 2, 2018

Shares of Walt Disney Co. rose more than 1% after being upgraded to outperform from neutral by analysts at Macquarie Research on Tuesday.

Analysts said in a note to investors that the company's distribution leverage and optionality, as well as its concentration of valuable intellectual property, which should only improve with the acquisition of 21st Century Fox Inc. are reasons for the upgrade. They also cited Disney's continued impressive theatrical momentum. "In an increasingly concentrated space where content is still king but now requires direct-to-consumer distribution, Disney has by far the highest chance of success," lead Macquarie analyst Tim Nollen wrote. Nollen's view is that media companies with ad-driven models will continue to struggle, while those with subscription models will win out in the end.

Disney, with its new standalone streaming service coming in 2019, is in a position of strength. Nollen also said Disney could be one of the biggest winners from tax reform, with an estimated 10% to 13% upside to 2018 earnings from tax benefits.

‘The Last Jedi’ Is 2017’s Highest-Grossing Film

With the latest ‘Star Wars’ installment a runaway hit, Disney finishes with three of the year’s top-grossing movies

Jan. 1, 2018

“Star Wars: The Last Jedi” became the highest-grossing movie of 2017 this weekend, giving Walt Disney Co. another banner year at the box office that left rival studios fighting for leftovers.

“The Last Jedi” has collected an estimated $533 million in the U.S. and Canada so far, and the space-opera sequel will still run in theaters for several more weeks.

After collecting $68.4 million over the four-day weekend, “The Last Jedi” has already passed the $532 million domestic gross of last year’s “Rogue One,” but is expected ultimately to lag behind 2015’s “The Force Awakens,” the top-grossing movie of all time with $937 million at the domestic box office.

“The Last Jedi” has grossed $1.04 billion world-wide and has yet to open in China, the world’s No. 2 box-office market.

In another indication of its box-office dominance, Disney has three titles total in the top-five grossing films of 2017, including No. 2 “Beauty and the Beast” ($504 million) and “Guardians of the Galaxy Vol. 2” in fourth place with $390 million. “Wonder Woman,” from Time Warner Inc.’s Warner Bros., was the third-highest grossing movie of the year with $413 million and “Spider-Man: Homecoming” from Sony Corp.’s Sony Pictures Entertainment came in fifth with $334 million.