Streaming prices are going up, ads are now a thing unless you pay more, password sharing is on the way out, and soon showing movies in theaters first will taker over, and finally, they’ll begin bundling services you don’t want with the ones you do, and have a minimum subscription term so you can’t just cancel and switch to a different service on a whim. That’s, pretty much their old business model, just cutting out the cable companies.
In the meantime, they’re playing hardball with actors and writers, in hopes of locking them in a long term contract with less money “because streaming isn’t making money”, before much of the above takes hold.
He technically didn’t. It was originally owned by George Lucas! But it was mostly just the cgi arm of his special effects. Jobs bought it off Lucas and turned it into the Pixar movie studio we think of today. (Jobs is credited as executive producer on the original Toy Story)
I’m not convinced. I’m also in the habit of not saying “never” all that often, so I won’t do so here.
That caveat out of the way, I feel this is just non-expert observations of superficial similarities. People that follow this stuff need things to speculate about, to get excited or despondent (or, paradoxically, both) over.
Unless I’m missing something, Apple’s largest acquisition to date was $3b for Beats. That was a purchase that played directly into their core business market: consumer electronics. It tied directly into their history and consumer strength with music and audio. If the purchase went through and ended up being a bad decision, it posed no meaningful danger to Apple’s brand or business.
Disney has none of that. They also have a market cap of ~$160b. Apple would need to pay a large premium to do an acquisition. This would cost them well over $200b, maybe even encroaching on $250b. That’s a high single digit percentage of Apple’s total value, not quite making it to 10%. The risk and the expense would be enormous for them. Not even touching on the unavoidable legal hurdles that they would have to clear, which adds more expense. And to tie it all together, Disney has no serious integration with Apple’s core businesses. Disney is a video, toy, and theme park company, with 50% more employees than Apple.
Not going to say never, but this just doesn’t add up as anything that makes any sense.
Disney has none of that. They also have a market cap of ~$160b. Apple would need to pay a large premium to do an acquisition. This would cost them well over $200b, maybe even encroaching on $250b.
To preface this, I don’t think this is at all a likely thing to happen but my understanding of the current theories is that Disney would first divest itself of some of its business units prior to a sale of the company. No more ESPN or ABC, for example. The acquisition would still be huge, of course, but not as big as Disney is today, perhaps closer to 5% of Apple’s value.
Yeah this makes no sense for the reasons you stated. One of Apple strengths is their warchest of cash, why would they leverage that on something like this?
Disney feels like a big fucking gamble right now too. The only sentiment I'm hearing about them and streaming services in general right now is pretty negative and they've had to jack their prices up again recently to shore up balance sheets. Also if anything, Apple already suffers from institutional bloat within the organization. I don't see how they could remain focused with Disney now in the mix.
Like you, I'm not saying never, but this seems like one of the dumber big speculations I've heard in a while. I'd believe them buying a major video game studio way before I'd believe this.
Apple already makes media for Apple TV. Their hope is that winning exclusives will help drive AppleTV sales and just make their eco system of devices more appealing.
Now imagine if all Disney content were Apple exclusives. That’s a hell of a lot of weight to put behind their hardware business. They would immediately change the streaming business and vastly open up their options in terms of manufacturing media hardware to push with this new media content.
I’m not saying all that would work, just that you don’t have to think too hard to understand how this could play in to what Apple does.
Thing is the Disney catalog is already stale in terms of backlog content unless you have children (who are 100% not the target demo for Apple Vision). And the new high-budget stuff they're making is mostly Star Wars and Marvel and people are getting real sick of it. Disney+ has seen dropped subscribers for like 3 consecutive quarters now. Their big blowout debut IMO largely had to do with a huge captive audience of bored people stuck at home during the pandemic.
Ton people don't even know or care that Andor exists, Obi Wan got real bad reviews, and Boba Fett was pretty lukewarm. And then apparently that new Marvel show is trash and nobody likes it and some of the recent ones before it were pretty forgettable.
Also I'd argue Pixar is past its prime and they and Disney can only put out so much content in a calendar year. Those movies take forever to complete.
I would be way more willing to buy the idea that Apple and Disney are looking into some strategic partnerships. It seems to already be the case based on what they've teased for Apple Vision, but I just can't see how anybody thinks Apple tying a $200 billion weight around their neck like Disney doesn't look like an insane gamble. They're way too shrewd of a company for that in my view.
I’ll just have to acknowledge your opinion and let it stand because I thoroughly disagree. I can’t see how anyone could possibly claim that the combination of Marvel + Pixar + Star Wars + Disney’s kid movies are in any way a stale catalog when they command such a massive % of the dollar and attention market. Disney is the one streaming service that actually started as a media a catalog. No other company had the library to just turn on streaming and become a streaming company overnight. Methinks you put too much importance on fanboy reviews of ObiWan if you think they mean Disney is over. And no, Andor is not a hidden gem. 674 million people watched the finale, and it got 8 Emmy nominations.
Disney stock is down ~56% from its high in March 2021 and its last three consecutive quarters have seen a drop in Disney+ subscribers. Disney is even trading lower right now than before its huge run during the pandemic.
And I'd love to hear the scenario where it gets those gains back in a reasonable amount of time outside of the context of yet another pandemic. Seems like a terrible investment to me.
But like you said, we'll just have to agree to disagree.
Yep. We will. I don’t read so much into fluctuations in the stock market, especially highly distorted views like “let’s compare a company to its 5 year peak to assess how they’re doing.” What has Meta done in the last 5 months to triple its value? Why is Amazon down 25% from its 5 year peak? Why is Tesla down over 50% from its 5 year peak? I guess these companies are worthless and Meta is taking over the world? No. The stock price measures the perceived opportunity for gain from short term speculative investment, not financial performance, not assets, not the strength of the Disney IP catalog.
I think it’s kind of the point that Disney isn’t in Apple’s core business. It would diversify their company. We can’t say that media is totally outside Apple’s business, because they do now make movies and TV shows (like Ted Lasso, Severance, and Foundation). But this is a part of their business that could grow a lot.
You make many other valid points, I just wanted to push back against the comparison with Beats as if not being in electronics hardware makes this a bad idea. It’s actually the whole point.
Add comment