Netflix and Disney trading locations: Upstart vs Old Guard



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The Queen’s Gambit on Netflix and Disney’s Mickey Mouse

Netflix; CNBC

Disney and Netflix pride themselves on storytelling. Now, they’ve changed places when it comes to the stories they tell on Wall Street.

Netflix said on Tuesday it would consider repurchasing shares for the first time since 2011. After nearly a decade of borrowing $ 15 billion to fund original content, Netflix said on Tuesday it planned to have a positive cash flow after 2021 and that it would no longer need the outside. financing of its operations.

Disney, meanwhile, temporarily suspended its dividend last year and heard calls from activist investor Dan Loeb to end its $ 3 billion annual payment to shareholders for good. Loeb wanted Disney to funnel that money into original content, using as a model Netflix’s surprising rise from an $ 11 billion company to a $ 220 billion media giant.

While Disney has yet to end its dividend, the company is focusing its operations on streaming. Disney plans to roll out dozens of Star Wars, Marvel and Pixar films and series in the coming years for its flagship streaming service, Disney +. The service gained over 86 million subscribers in a year, well beyond Disney’s initial expectations, and the company now expects between 230 million and 260 million subscribers by 2024.

“It’s super impressive what Disney has done,” Netflix co-CEO and co-founder Reed Hastings said on the Netflix earnings conference call. “It’s an incredible execution for a holder to pivot to face the insurgents. It shows that members are willing and interested in paying for more content because they crave great stories. And Disney has good stories.

But while Hastings still refers to Disney as the incumbent, investors see a different picture. There’s a reason Disney shares gained more than 2% after hours on Netflix News, causing Netflix shares to rise by over 12%. Investors don’t see the battle like Disney versus Netflix. They see that Disney wants to be like Netflix and that there is room for both.

Netflix was founded in 1997. Disney has been around for almost 100 years.

But in the world of streaming video, Netflix is ​​the incumbent and Disney the upstart.

The pupil has become the teacher.

WATCH: Netflix: We’ll be cash neutral this year, positive every year after

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