Wednesday, August 9, 2017
Disney's Stock Dips As Streaming Push Unnerves Some Investors
Disney announced its plans on Tuesday alongside quarterly results showing further subscription losses as it struggles to keep hold of viewers defecting to online streaming services offered by Netflix, Time Warner Inc's HBO and others.
According to Reuters, under its plan, Disney will stop providing new movies to Netflix starting in 2019, a deal analysts at RBC Capital Markets estimate earns Disney more than $100 million a year. Some on Wall Street have doubts that Disney can easily replicate that revenue stream.
"The Disney product is taking a very successful and settled part of the business model (pay TV economics for films) and putting it at risk in the hopes of building an asset with more long-term value," Cowen and Co analysts wrote in a research note.
Disney said the new services would be based on technology provided by video-streaming firm BAMTech, in which the media company is increasing its stake to 75 percent by paying $1.58 billion.
Posted 3:01:00 PM