Disney is laser focused on streaming and they are targeting the Netflix throne, the stock prices have increased by 5%.
In a Monday press release, Disney has announced the restructure of their media arms in a move to centralize multiple businesses into one entity which will oversee all distribution and monetization of Disney content, which naturally includes their streaming platform Disney+. This will lead to a significant boost in funding original content.
The COVID situation was not in favor of the giant Disney, they have had a rough year so far as a result of lockdowns in their parks, experiences and product department which resulted in a profit loss of over 91% in the first quarter of 2020 followed by a $4.72 billion in the following quarter.
Continuing the halt in parks and the cancel of cruises meant an additional loss of $3.5 billion by August this year.
Even though the increase by 2% in revenue and reports of more than 100 million Disney+ subscribers, the company still bled $7.6 million last quarter which more than the $562 last year’s quarter.
Disney stock struggled before COVID
Even before the COVID pandemic, the stocks were down 10% while the tech-heavy NASDAQ are up more than 37%, even the S&P 500 index which includes the struggling industries like the airlines are up 9%.
Disney market value has shrunk by $38 billion, now they are worth about $225 billion. It is worth noting that by now they have spent the entire year in the red.
While Netflix has had a share price explosion, they went up from $326 to $540, that is growth by an impressive 65%. Which means the Netflix’s market value has increased by $84 billion to reach $238 billion?
So comparing the two giants market value, we notice that only $38 billion is separating them. Worth noting that Disney has formally redirects all if its might to growing its streaming business.