Tag Archives: Amazon Prime

Most of Disney`s revenue comes from Media Networks with $5,9 billions in revenue but it is declining

I have always been a very big fan of Walt Disney. Not only because of the equities but all the work they have done. All the films and all the cartoon heroes. That`s what I call real big entertainment in first class.

Walt Disney is expected to report earnings on Tuesday 8 August and ESPN will be a key in the report this time. In May, we saw bad news from the ESPN segment and the shares has declined since the last report.

 

 

$1,1 billions of the revenues comes from Consumer products & Interactive media. $2 billions comes from Studio Entertainment and $4,3 billions comes from Parks and Resorts while most of Disney`s revenue comes from Media Networks with $5,9 billions in revenue.

But, sadly for Disney, the revenue from Media Networks is declining. The cable TV and broadcast networks have been hit hard and millions of subscribers have jumped over to on demand TV and live streaming.

Many people are cutting cords and spend more time and money on streaming services such as Netflix and Amazon Prime Video. According to Nielsen, ESPN has lost more than 13 million subscribers in recent years.

They had about 100 million subscribers in 2011 but today it is less than 87 million.

ESPN are facing sharp competition from Amazon Prime. Their flagship sports news program SportsCenter has dropped dramatically over the last decade.

Amazon outbid Sky Sports for the UK telecast right of all ATP events and is paying about £10 million per year for this deal. Amazon is also paying about $50 million for rights to stream 10 Thursday night games of National Football League.

This is why ESPN has been a worry for investors for a while. Advertising was also soft in Q1 (Disney`s F2Q). All this is why analysts are lowering their price target for the Disney stock. But Disney are taking steps to erase investors fears.

They have partnered with OTT players. They have also partnered with AT&T`s OTT service DirecTVNow. In addition; many Disney channels and ESPN are a huge part of the recently launched YouTube Live TV service and they acquired a 33% stake in the sports streaming site BAMTech.

ESPN and Turner Sports signed a new deal with NBA and they pay about $2,6 billion per year for that deal which is 180% more than last year. The competition in the market is pushing the prices up for many of the sporting events and this is squeezing the cable network segment.

Disney hiked ESPN subscriber charges including laying off hundreds of staff to control costs to meet the challenges. Rising costs and declining subscribers has decreased ESPNs income to Disneys profit. It`s nearly half of what it was only five years ago.

While ESPN is a big worry for investors, other segments are doing it very good.

Disney Inc will report earnings on Tuesday 8 August after market close. The report will be for the fiscal Quarter ending June 2017. The consensus earnings for the quarter is $1,53 while the earnings for the same period last year was $1,62.

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Advertisements

Leave a comment

Filed under Stocks

Amazon will advertise on Super Bowl

Another Wall Street darling is set to report after the closing bell today. A company we talked about nearly every day in the late 90`s. A company that survived the dot-com bubble. A company that is up 33,000% since then and up about 90% last year.

Amazon has become a big competitor to Wal-Mart and Target and it is expected to see that trend to continue. Amazon Prime`s subscriptions have doubled in two years and they offer users free two-day shipping, cloud storage and streaming.

amazonbowl

The Estimize Mean consensus calls for EPS of $1,64, three cents above the Wall Street estimate. Revenue expectations for $35,9B in-line with the Street`s consensus, and higher than guidance of $35,13B. Sales are expected to rise about 20% YoY.

I expect to hear more about their cloud computing platform which has become a new business segment in the company. Amazon Web Services (AWS), accounts for about 8% of total revenue, and the business is growing.

So are Prime time, which is a strong loyalty program for Amazons customers. They have free shipping and have the ability to stream and listen to  music  in the same package. Its been proved that loyal customers at Amazon Prime shop twice or more per month than non-subscribers.

Amazon said they added 3 million Prime subscribers before christmas day last year, and it isnt slowing. If this continue, Amazon will end up having 50% of all U.S hoseholds subscribed to Prime in 2020, according to Macquarie Research. Thats awesome.

Amazon hired a record 10,000 people in Europe in 2015 which is taking its workforce above 41,000. This will continue, and Amazon is stepping up its investment plans in Europe this year. In 2016, they plan to hire more staff as it seeks to expand amid a stricter scrutiny of its tax, privacy and employment records.

Amazon is also planning to advertise during this years Super Bowl for the first time. An ad by «30 Rock» star <strong>Alec Baldwin</strong> and former National Football League quarterback <strong>Dan Marino</strong>. The ad will highlight Amazons Echo speaker and its voice-activated virtual assistant Alexa. What do you think will happen the day after that ad? The sales will skyrocket.

What`s peculiar about Amazon is the price earnings at 831,80! Wow!

wallboard

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Shiny bull. The author has made every effort to ensure accuracy of information provided; however, neither Shiny bull nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in precious metal products, commodities, securities or other financial instruments. Shiny bull and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

Leave a comment

Filed under Stocks