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Disney Rattles Media Sector On Pullback Of Marvel, 'Star Wars' Offering

Disney Rattles Media Sector On Pullback Of Marvel, 'Star Wars' Offering
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Walt Disney Co (NYSE: DIS)’s sounding more and more like its target audience, embracing the definitive motto of youth: “Mine.”

The company decided last month that it was done sharing its expansive media portfolio with Netflix, Inc. (NASDAQ: NFLX) and would instead launch its own branded distribution platform.

At the time, Disney said its direct-to-consumer streaming service would exclusively host all content with the exception of the profitable Marvel and "Star Wars" franchises. In fact, Netflix confirmed its continued partnership on the Marvel front.

But Thursday, Disney revealed the full extent of its already damaging withdrawal: Marvel and "Star Wars" aren’t to be shared.

“Clearly there is a gold rush happening in the world of streaming content and everyone is battling for their piece of a very lucrative pie that not only increases the size of their overall eco-system, but also ramps up branding opportunities and ways to create synergies for companies like Disney across all of their business verticals,” Paul Dergarabedian told Benzinga in August.

Disney’s stock dropped 1.8 percent on the update before plunging another 2.1 percent on CEO Bob Iger's report that 2017 earnings per share will be in line with 2016 figures.

Media peers didn’t fare much better Thursday.

Charter Communications, Inc. (NASDAQ: CHTR) fell 3 percent, Twenty-First Century Fox Inc (NASDAQ: FOXA) 2.6 percent, Viacom, Inc. (NASDAQ: VIAB) 2.6 percent, Discovery Communications Inc. (NASDAQ: DISCA) 2 percent, and CBS Corporation (NYSE: CBS) 1.5 percent.

Still, Netflix remained unshaken, vindicating Loop Capital and Bernstein analyses anticipating no long-term effects from the lost content. The streaming site confirmed that subscribers will continue to have access to Disney-licensed content for at least two more years.

"As with Disney films, US Netflix members will have access to Marvel and Star Wars films on the service through the end of 2019 and 2020 in many cases," a Netflix spokesperson told Benzinga.

Related Link: The Netflix Effect Is Only Half The Story For Disney

Latest Ratings for DIS

Aug 2018B. Riley FBRMaintainsNeutralNeutral
Aug 2018BMO CapitalMaintainsMarket PerformMarket Perform
Jul 2018Credit SuisseInitiates Coverage OnNeutral

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Posted-In: Bob Iger Marvel Paul DergarabedianAnalyst Color News Analyst Ratings Tech Media Best of Benzinga


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