Investment Thesis 1: Strategic Brand Portfolio and IP
- Disney's brand portfolio has provided the company with a competitive moat that is difficult to mimic
- Disney is the registered owner of 3019 patents and 2287 trademarks
- Disney possesses most of their patents in the US (2255) with China coming second (166)
- IP is leveraged through their Media Network, Studio Entertainment, Direct-to-Consumer and International Platforms segments
- 18 brands in media networks, 10 brands in P&E, 14 brands in Studio Entertainment and 3 brands in DTC
Investment Thesis 2: Growth through Streaming
- Disney's three main streaming pillars, Disney+, Hulu, and ESPN+ have been growing steadily YoY producing steady cash flow
- Disney projects that Disney+ will reach 123.4 M subscribers, Hulu will reach 115.6 M subscribers, and ESPN+ will reach 12 M subscribers (2024)
- Disney's continued growth in the streaming space will be supported by their recent restructure to focus on their direct-to-consumer business
- Disney+ launched in LATAM on November 24th
- Q4 20 Disney+ 73.7 M subscribers vs 65.5 M estimate
Investment Thesis 3: Diversified Revenue Streams
- Media Networks has provided steady cash flow for Disney over the past three years reaching an all-time high of $28,393 B at the end of 2020
- Direct-to-Consumer has experienced the most growth out of any segment reaching $16,967 B at the end of 2020
- Parks and Experiences suffered a steep loss from $26,255B to $16,502 due to Covid-19 which is expected to recover in 2021
- Revenue from Studio Entertainment loss some ground in 2020 to $9,636 B due to studio delays