business
Analyst Suggests Disney Could Raise Stock Price by Exiting Streaming
A Wells Fargo research note argues that Disney could increase its share price by 40 percent by returning to a model focused on content production and licensing rather than direct distribution. The report estimates potential annual licensing revenue of up to $15 billion if Disney's library were made available to competing platforms.
Jul 13, 11:23 AM·1m read1 source
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A Wells Fargo research note released Sunday proposes that Disney could increase its share price by 40 percent by shifting away from direct streaming distribution and returning to a model centered on content production and licensing. The note states that Disney could generate nearly $4 billion annually from a pay-1 movie output deal similar to Sony's arrangement with Netflix.
When pay-2 rights and the company's library are included, licensing revenue could reach $15 billion.
The report argues that Disney's box office performance, theme park business, and brand value would not suffer if its content library were available on competing global streaming services. It adds that investors would benefit from a simpler business model with the company focused solely on content creation.
Disney shares rose 1.75 percent in early trading on Monday following the report's release. The note comes as other major technology and entertainment companies maintain established positions in streaming, while some industry observers have discussed potential consolidation among remaining competitors.
