The Walt Disney Company is a company based in the United States. The company offers a wide range of entertainment products and activities to consumers around the world. The company designs, produces, and distributes entertainment content made by Disney as well as its subsidiaries like ABC and many others. The company also operates theme parks and sells merchandise. It was founded in 1923.
Is it a Good Investment?
- Disney is a great reopening play in an investor’s portfolio. Due to the pandemic, the company had to shut down all of its theme parks and cruise ships (among other venues) and delay the production of many shows and movies. However, once the pandemic is over, the company will see strong demand for all of its products return.
- The company has been trying its best to compete with another entertainment juggernaut, Netflix. With its Disney+, ESPN+, and Hulu streaming platforms, the company has been effectively competing with Netflix. Disney+, for example, has been crowned the fastest-growing streaming platform in the world and already has over 116 million subs in the first couple years of operation.
- Disney will continue to see strong growth for all of its product returns during the holiday season. The number of people who watch movies, visit the company’s theme parks, and purchase the company’s merchandise will steadily increase. This will benefit the company’s recovery and results. in the short to mid-term and will also benefit investors in the company.
- Disney has extremely strong brand recognition in all of the markets that it operates. This is driven by its strong portfolio of intellectual property (IP). Some of the IPs that it operates include Star Wars, Mickey Mouse, Toy Story, ESPN, National Geographic, and many others. This strong brand recognition will benefit the company and its investors.
- Because of this strong brand recognition, the company has been able to continue to hike prices on all of its products (especially streaming). At the moment, streaming is a loss-making business for the company. However, as the company has been slowly raising prices on these products, it will get the company closer to profitability in this segment.
- One of the things that makes Disney a good long-term investment is a strong pipeline of future movies. Some examples include further growing the Star War series as well as dropping new superhero movies like Shang-Chi. New content will further drive growth in other parts of the flywheel, like parks and streaming. This will benefit the company and its investors.
Why is it Not a Good Investment?
- The company faces tough competition in the entertainment industry. Some of these competitors include Netflix, Apple, Amazon, NBC, CBS, and many others. This competition might hurt the company and its investors in the future.
I think that Disney is a great long-term investment due to its position as a good reopening play, quickly growing its streaming platform (Disney+), an upcoming holiday season, good brand recognition, price hikes on streaming, as well as a strong pipeline of future content. However, tough competition might hurt the company and its investors in the future.