Specialist
Former Senior Manager, Digital, at The Walt Disney Co
Agenda
- Implications of Disney+ roll-out on Disney's (NYSE: DIS) overall earning power
- Ability to offset potential pressures on licensing and box office revenues with incremental cash flow opportunities
- Main possible user data monetisation opportunities – implications on desired Disney+ subscriber numbers and pricing
- Outlook for 2020 and beyond – international expansion headwinds and intensifying streaming competition
Questions
1.
Could you give an industry-wide overview of Disney’s operating environment, particularly as it pertains to the recent ramps in D2C efforts? What two or three key trends or drivers will impact Disney the most?
2.
Some of the new entrants have different business model approaches to Netflix. What are the general pros and cons of an ecosystem approach in terms of how that is different from what Netflix has done?
3.
From an SVOD [subscription video on demand] platform perspective, there is some uncertainty around whether or not it is a complement vs a substitute to Netflix. Wallet share of the D2C consumer is to be pegged at around USD 25 per month. How should we think about whether or not Disney will take that consumer spend from Netflix or elsewhere, as we think about how it fits into that wallet?
4.
What do you view as the main threats or opportunities that are in front of as Disney+? The data monetisation seems like a solid opportunity. Are there any headwinds existing alongside that?
5.
How should we contextualise Disney planning to spend USD 1bn on original content in 2019? Is it a reflection of the strength of Disney’s IP, or given that that IP is largely feature film, it needs to ramp up to provide the episodic content that seems necessary. What are your thoughts?
6.
Disney is setting out for 60-90 million subscribers by 2024, of which a third will be US and the rest coming outside of it. We have sources such as Apptopia already pegging 22 million mobile downloads in the first month of it being available. What are the likely challenges it could face in reaching those goals? Which markets might be difficult?
7.
You outlined how we should think about the potential for penetration based on US households. Does that correlate across international markets? Is there any way to think differently about particular markets that might have better or worse penetration prospects?
8.
Management pegged loosely that Western Europe and APAC would come out in early 2020, followed by Eastern Europe and LATAM in early 2021. What is the impact of this? You mentioned the grandfathered content being an issue. Is that more profound in international markets, and is that something that could cause a delay in a launch?
9.
Is this Disney+ transition NPV-positive overall for Disney? How should we think about the incremental cash flow opportunities that have the potential to offset potential for box office pressure, forgone licensing revenues some shifts that happen in theatre windows? How do you think about whether or not this will be accretive to the business overall?
10.
You mentioned two things that I expect to conflict with one another as the business scales. One is efficient marketing and the importance of it and the ability to generate low churn. The low price bundling and wholesale with Verizon seems like it is not thinking about being too efficient from a marketing perspective. You talked about the strategic value being assigned on the data. It seems that only comes after a point where the amount of subscribers allows Disney to finally drive those attach rates on some of the different segments of the business more efficiently, or disintermediate a third party like a travel agency, etc. How should we think about the balance it needs to find between those two things?
11.
Do you have any closing remarks or anything you would like to expand on?
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