Tom Rogers on Disney's Tepid Growth and Streaming Challenges

Disney's Mixed Financial Results

• 📉 Disney's stock slid nearly 3% following mixed third-quarter results, with earnings exceeding expectations but revenue slightly missing the mark.
• 🚀 Despite the overall tepid growth, Disney saw growth in its streaming business.

ESPN's New NFL Deal

• 🏈 The ESPN NFL network deal is highlighted as a significant positive, expected to bolster the streaming service.
• ⚠️ A caveat is the Red Zone channel not being included in the standalone ESPN streaming service, requiring an additional pay upgrade.
• 🎯 Overall, the deal is considered very good for the sports side of the business.

Streaming Growth Concerns

• 📊 Both Hulu and Disney Plus show stalled subscriber growth, especially when compared to Netflix.
• 📈 Advertising revenue on the streaming side was flat to slightly declining, which is a concern as it should be Disney's growth asset.
• 💡 The speaker expresses that streaming should be the company's growth asset, but the current numbers raise doubts.

Comparison with Netflix

• 📺 Netflix's results are viewed as much stronger compared to Disney's.
• 🚫 Both companies are criticized for not providing subscriber numbers, which is seen as misguided, particularly for Disney given its slower sub growth.
• 📊 Advertisers need transparency on subscriber numbers, especially for ad tiers, making the lack of disclosure problematic.
• 🌟 Despite challenges, Disney has achieved more streaming revenue than linear revenue, with nearly half of its viewing on streaming platforms, a unique position among legacy companies.

Broader Streaming Industry Challenges

• 🌐 The streaming business is inherently difficult, with many companies experiencing growth pains.
• 💰 Companies are focusing on cutting costs to increase profitability.
• ⚠️ A surprising move was the CFO indicating no further investment in domestic programming, despite the need for entertainment content to drive engagement.
• 💸 Increased sports costs are straining budgets, reducing funds available for entertainment programming.