Disney share price down 2% this week after unveiling new streaming bundle pricing
The Walt Disney Company saw its share price slide 2% this week after delivering mixed third quarter results and revealing new streaming bundle pricing.
The Walt Disney Company fell more than 1.4% to $1.37 a share this week after the company reported a mixed set of third quarter (Q3) results on Tuesday and unveiled its new streaming bundle pricing.
The Star Wars franchise-owner said that its upcoming streaming service, named Disney+, will be available as a bundle that includes ESPN+ and Hulu for $12.99 – the subscription price as rival Netflix. Disney+ on its own will cost just $6.99 at launch, the company said.
Disney Q3 earnings fall short due to streaming investment
Disney saw revenues grow 33% to $20.2 billion, but total costs increased 55% to $17.5 billion compared with the same period a year prior, with the company’s direct-to-consumer business recording a loss of $533 million.
Its results reflect the costs associated with the upcoming launch of its Disney+ streaming service, with the business investing heavily in technology and new content for when it goes live in November.
Its Q3 earnings were also dampened by M&A-related activity, with a sub-standard performance from its 21st Century Fox film business, one of several assets Disney bought from the Murdoch media group in a $71 billion deal.
Netflix share prices slumps on Disney+ pricing
In the wake of the Disney+ pricing announcement, Netflix saw its share price slide more than 3.5% to £2.98 a share on Tuesday. However, in the days that followed Netflix’s stock clawed back its losses with it looking likely to end the week a touch higher than Monday’s open.
Practise trading Disney and other media stocks with an IG demo account.
‘We project [Disney] will win and [Netflix] will lose the US SVOD [subscription video on demand] battle,’ Senior Analyst at Needham Laura Martin wrote note to investors on Wednesday.
‘US consumers have shown a reluctance to add to their three SVOD services,’ she added. ‘This implies that [Disney’s] projected 20 million to 30 million US subs by 2024 will mostly come from Netflix’s 60 million US subs.’
This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
See an opportunity to trade?
Go long or short on more than 17,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Forex
- Shares
- Indices
