Disney vs. Netflix (W/ David Trainer)
David Trainer, CEO of New Constructs, returns to Real Vision to update his winning trade on Disney and to discuss how the company’s new streaming service, Disney Plus, will fare against its competition. He discusses the current expectations for Netflix’s profitability, highlights Disney‘s growth outlook, and suggests how best to play the situation, in this interview with Justine Underhill. Filmed on June 18, 2019.
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Disney vs. Netflix (W/ David Trainer)
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Transcript:
For the full transcript visit: https://www.realvision.com/tv/shows/t...
JUSTINE UNDERHILL: I want to start out with a great job on your call on Disney when you were last here in February. You were quite bullish on the stock. And it's been in the headlines ever since especially because of its Disney Plus, the new streaming platform. So, just to recap, when you were here in February, you were looking at the stock reaching a potential target of 170. It has gone up to 140. And that's about 25% upside since your call. Could you give us a little bit of background as to what you were looking at then? And where you see the stock going now?
DAVID TRAINER: Yeah, the main thing is that Disney's actually making money, a lot of money, while one of its principal competitors, Netflix, is losing a lot of money. And in addition to that, when you look at the pipeline of content that Disney has available to it, it's unrivaled by anybody in the world, whether it's Toy Story or Spider Man or Avengers, and I don't know. You know how many Avengers movies there are, right? There's like a new one every week. And they keep setting records. It's a great pipeline. It's a great bench of content. But what makes Disney I think all the more powerful in this space is its ability to monetize that content. So, one of the great things about sequels is that there's not a lot of Lyft required, you don't have to go out and sell the world on a new concept. They're going to show up with very little advertising, because they've already bought in on the last one. And then there's the whole theme parks thing. And then there's the whole merchandising thing. Disney, they make money on this stuff. And the theme parks are actually making money for the first time in a long time. They're seeing significant profit growth, but also the merchandise. And this ability to monetize the content is really unrivaled as well. And so, what you have with Disney is this ability to be really smart about buying new content. So, I remember when they first bought the whole Star Wars deal, I think that was a $3 billion deal. I remember we thought oh, my gosh, that's a lot of money. I think they've made 10 times that already. And then who knows how much more they're going to make.