Disney+

Disney recently announced that they are launching their own streaming service called Disney+. This will directly take on Netflix which currently dominates the video streaming market.

Disney(DIS) is an ‘8-80 company’. An 8-80 company is the one whose products are used by 8-year kid, an 80-year elder and everyone in between. It also means that if you buy the stock when you were 8 year old, you should hold it until you are 80 years and keep holding it after that too.

These companies have a very reliable business model, very strong moat and little to no competition. Very few companies enter my 8-80 list.

Disney is on my 8-80 list because they have a lot of things going for it:
It has a strong brand moat.
Multiple recurring sources of revenues with amusement parks, movies and merchandise.
Adding Fox assets(including a majority stake in Hulu) is amazing as they diversify geographically in Europe and Asia.
Intellectual assets like proprietary rendering engines. Fun fact: Photoshop spun out of ILM which Disney now owns.
Good dividend yield!

And now Disney+, by controlling distribution of its content and going direct-to-consumer, Disney can deepen its already strong connections with customers in a way that benefits all parts of the business: movies can beget original content on Disney+ which begets new attractions at theme parks which begets merchandising opportunities which begets new movies, all building on each other like a cinematic universe in real life.

Big D is too powerful to ignore 🐭

Although the price has increased quite a bit recently, I think it is still a good long term hold.

I’m looking forward to how the Fox assets and Disney+ change the streaming service.

Disclosure: Long DIS

Similar reads: Future of TV

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