DIS Shareholders and Stock Info ONLY

[clarker99]

Yes, a typo on my part because I had just read your reference to 2019 regarding "DTC" (i.e., Disney+).


You were talking about the strength of the parks vs. the strength of the streaming service. Those were very different in early 2021 vs. now. There's no use trying to say what should be happening to the stock now because of what condition it was in in Feb/Mar 2021.

I am not sure what you are trying to say here. I am trying to talk about what moves the stock and it is not the parks Not in 2021 and not in 2024. If Parks drove the stock price it would be at all time highs.

 

[wabbott]

https://www.bnnbloomberg.ca/apollo-...firms-considering-a-redstone-buyout-1.2024354

Apollo Is Among Private Equity Firms Considering a Redstone Buyout
Lucas Shaw, Ryan Gould and Michelle F. Davis, Bloomberg News
January 19, 2024 at 2:39 PM CST

(Bloomberg) -- Apollo Global Management Inc. is considering making an offer for National Amusements Inc., the Redstone family company that controls film and TV giant Paramount Global.

Apollo is one of a number investors, both wealthy individuals and professional money managers, that have reached out in recent weeks to BDT & MSD Partners, the investment bank advising the Redstones, according to people familiar with the discussions.

Film and TV producer David Ellison is weighing an offer for National Amusements that could involve merging his company, Skydance Media, with Paramount, the Wall Street Journal reported. Private equity firms RedBird Capital Partners and KKR & Co. are both investors in Skydance.

Apollo, one of the world’s largest money managers, is also an investor in Legendary Entertainment, another independent film studio.

The Redstone family, led by Shari Redstone, controls 77% of the voting stock in Paramount, the parent of CBS, MTV and other film and TV properties. Paramount, like other media giants, is struggling with declining viewership for traditional TV and ongoing losses in streaming.

At a recent price of $13.20, the actively traded Class B nonvoting shares of Paramount are down more than 85% from their 2021 high of over $100.

The family, along with the Paramount board, has been more open in recent months to doing a transformative deal, according to people familiar with their thinking.

 

[wabbott]

https://variety.com/vip/ctv-ads-cant-replace-linear-tv-fast-enough-1235870297/

January 16, 2024 - 6:00am PT
CTV Advertising Can’t Replace Linear TV Fast Enough
by Tyler Aquilina

It’s beyond cliché by now to say the streaming TV model is “going back to cable,” but, frankly, the historical parallels could not be more ironic if penned by a heavy-handed dramatist.

“Will Cable TV Be Invaded by Commercials?” ponders a New York Times headline from 1981, over a story that begins by noting, “There has been a widespread impression — among the public, at least — that cable would be supported largely by viewers’ monthly subscription fees. These days, however … cable experts are talking as glibly about the potential advertising revenues as they are about opportunities for programming.”

Replace “cable” with “streaming,” and almost that exact same paragraph could run in The Times this very day, as we enter a year in which connected TV advertising — the ad category including SVOD, AVOD and FAST — is expected to truly come into its own.

CTV is projected to be the fastest-growing channel for ad spend in 2024, with international advertising giant Dentsu forecasting nearly 31% global spending growth in the category year-over-year. Meanwhile, investment company GroupM projects ad revenues from CTV to increase 13.8% in 2024, a bigger annual jump than “pure play” digital ad revenue (including retail, search and social media). Revenues will reach $16.6 billion in the U.S. alone this year, per GroupM’s forecast.

This growth will be fueled by the continuing entrance of new players into the streaming ad game — Amazon’s Prime Video will introduce commercials later this month — as well as the continued ramp-up of streamers’ ad-supported tiers, in terms of both subscribers and engagement levels.

“The thing we’re really excited about is the engagement,” Netflix president of advertising Amy Reinhard said at the Variety Entertainment Summit at CES 2024 last week, noting more than 85% of the streamer’s ad-tier users spend two or more hours watching Netflix per month. Meanwhile, she added, the ad plan has surpassed 23 million global monthly active users, a respectable leap from 15 million a little over two months ago.

It’s perhaps unsurprising, then, that Netflix’s ad revenues are expected to increase sharply this year, from 2023’s estimated $685 million to more than $1 billion in the U.S., per Insider Intelligence, while Amazon will more than double its CTV ad revenues from about $1.4 billion to upward of $3 billion.

This is all well and good for those pure-play tech companies, of course, but this growth is likely going to come at the (further) expense of traditional TV advertising. GroupM sees these revenues falling 10.7% in the U.S. in 2024, which will not be offset by CTV’s gains. U.S. TV ad revenue is expected to drop 5.1% overall, to $62.3 billion.

It’s hardly news that linear TV’s fortunes are declining, but it is noteworthy that the accelerating migration of ad dollars to CTV — one of, if not the single best, hope for legacy media companies to turn a profit in streaming — is bleeding the cash cow of broadcast and cable advertising dry at the same time.

Indeed, cable networks alone generated nearly $30 billion in U.S. ad revenues only five years ago but brought in just $22.4 billion in 2023, according to S&P Global Market Intelligence data. While the ad market on the whole saw improvements in the latter half of last year, TV did not, with all of the major media giants pinning poor Q3 linear network earnings on the weak advertising environment.

Based on GroupM’s projections and other advertising forecasts, that outlook is unlikely to improve this year, meaning legacy media companies have little choice but to plow ahead with growing their streaming ad tiers, in the hope that CTV can grow large enough to replace linear as the media sector’s money spinner.

The question is, can it?

Impressive growth trajectory aside, CTV revenues are still dwarfed by linear TV’s, due to lighter ad loads and the small scale of ad-supported streaming relative to broadcast and cable’s massive reach. Madison and Wall analyst Brian Wieser, for one, projects a 24% decline in available U.S. TV ad inventory by 2027.

It seems likely streaming ad loads will grow over time; hearken back again to the NYT in 1981 and recall that cable ad revenues were once described as “minuscule” — just $45 million in 1980. And the financial rewards of increasing ad inventory on streaming are going to be too great for any self-respecting business to pass up; it will simply be a matter of growing them gradually enough not to alienate viewers.

There are also significant opportunities in innovative ads that should help to expand revenue. Disney is already exploring bringing shoppable ads to its streaming platforms, and Amazon is certain to expand such ads on Prime Video to tie into its e-commerce platform after experimenting with the format on its Black Friday NFL broadcast.

Meanwhile, the demise of cookies on digital platforms — which will surely be accelerated by Google ditching the technology this year — will push more brands to CTV ad formats, where they can leverage a wealth of viewer data to better target ads to consumers.

GroupM, for its part, projects global CTV ad revenues to reach nearly $46 billion by 2028, noting the category could account for more than half of total TV revenue by 2026. But that’s probably small comfort to the companies dealing with demanding investors and very real secular decline right now, who will see the linear TV business continue to erode at an increasingly nerve-wracking pace between now and 2026.

Legacy media’s best hope, therefore, is to continue pushing customers to ad-supported plans and pray that revenues can accelerate faster than analysts expect — and, potentially, start to grow streaming inventories as consumers get more used to watching ads there. It’s hardly a perfect strategy, but considering these companies essentially opened the vein for their own bloodletting, they can hardly complain about imperfect strategies.

 

[wabbott]

https://www.msn.com/en-us/movies/news/a-hollywood-upstart-looks-to-become-a-major-player/ar-BB1gYqUd

He Arrived in Hollywood With Money and a Name. It Just Might Work.
Skydance Media’s David Ellison produced and financed movies and shows, and now he has his eyes on Paramount

Updated Jan. 20, 2024 - 12:01 am EST
by Joe Flint

David Ellison’s foray in the entertainment business is a tale as old as Hollywood itself—a rich kid comes to town with dreams of being a mover and shaker. The story typically ends the same way: Industry sharks smell blood and devour their snack.

But Ellison’s script has had a surprise twist—success. As much of the entertainment industry struggles to adjust to the economic realities of the streaming era, with layoffs and cost-cutting becoming the norm at Disney, Warner Bros. Discovery and NBCUniversal, Ellison has built his production company, Skydance Media, into a powerful and profitable maker of big-budget movies and TV shows.

Now the 41-year-old son of software billionaire and Oracle co-founder Larry Ellison is exploring a complex deal to take control of Paramount Global that could catapult him to media moguldom.

Ellison and investors in Skydance—whose hits include “Top Gun: Maverick,” “The Family Plan” and “Reacher”—are discussing a bid for media titan Shari Redstone’s controlling stake in Paramount parent National Amusements. If successful, they would later seek to merge Paramount with Skydance.

Though far from certain, the transactions put Ellison in the spotlight, testing whether his industry savvy extends beyond picking hit shows and films. Such a deal would mark the start of a long-expected reshaping of entertainment industry ownership after years waning moviegoing, cable declines and costly pivots to streaming.

“There are a lot of people with strong connections to lots of money and most of them turn around after five years with their tail between their legs,” said Jason Blum, founder and chief executive of horror-movie shop Blumhouse. Ellison has stayed focused on his core mission of mass-market entertainment and built a financially successful company, said Blum, who doesn’t currently have business with Ellison.

Entertaining the masses

Since launching in 2010, Skydance has positioned itself as a boutique of big-budget fare for streamers. When major studios such as Warner Bros. and Disney decided to stop selling to Netflix and other streaming platforms and instead focus on building their own, Skydance saw an opening and pounced.

Among its streaming credits are Netflix’s Arnold Schwarzenegger action show “Fubar” and Amazon Prime Video’s hit show “Reacher,” inspired by the Jack Reacher novels. Skydance made “The Family Plan,” starring Mark Wahlberg, for Apple TV+, which became the service’s most-watched movie ever after premiering last month.

Skydance, which now has about 1,300 employees, partnered with Paramount on Tom Cruise’s “Top Gun: Maverick” and “Mission: Impossible—Dead Reckoning: Part One,” as well as “Transformers: Rise of the Beasts” and additional “Mission Impossible” and “Top Gun” movies that are in the works.

The company has had misfires, too, including the movies such as the Will Smith vehicle “Gemini Man” and “Terminator: Dark Fate,” which were critical and commercial disappointments.

A recurring knock on Ellison is that his tastes are pedestrian. His sister Megan’s Annapurna Pictures makes critically acclaimed fare such as “Booksmart,” “She Said” and “Zero Dark Thirty,” which won an Oscar for best picture in 2013. Skydance content has more populist appeal.

That can be an asset in a town often criticized for being too coastal and insular in greenlighting film and TV projects.

“He’s not looking down on the masses,” said Ann Blanchard of Creative Artists Agency. “He wants to make sophisticated programming for millions of people.”

Skydance has committed hundreds of millions of dollars to animation, hiring former Pixar creative chief John Lasseter in 2019 as head of its animation unit, which has ballooned to 800 employees. But it has had mixed success: Apple and Skydance ended an animation partnership after just one movie—2022’s “Luck.” Its first animated movie for Netflix, “Spellbound,” is set to make its debut later this year.

Learning to fly

Ellison was raised primarily by his mother, and as a child was obsessed with flying and movies. He learned to fly a plane at 13 and by his late teens, was participating in air shows and doing competition aerobatics, steering planes through complex maneuvers to entertain crowds below.

When he wasn’t in the air, his mother would often take him and his younger sister, Megan, to the movies. The pair would binge films like “Star Wars” and “Rocky” at home.

To his father’s chagrin, Ellison opted to study filmmaking at the University of Southern California, instead of attending one of the Ivy League schools where he had been accepted. He dropped out in pursuit of real-life experience. With his blond hair and steely blue eyes, he co-starred as a World War I fighter pilot in the 2006 film “Flyboys” in his 20s. The movie—much of which was funded by his father—flopped, as did a second movie, “Northern Lights,” that he produced and starred in.

With cash from his father and advice from mentors including Steve Jobs and David Geffen, he launched Skydance. Advice on how to navigate the snake pit of Hollywood dealmaking came from insiders such as renowned lawyer Skip Brittenham and Jeff Berg, a powerful agent and Oracle board member.

Ellison’s father was close with Jobs, the Apple co-founder who was also the architect of Pixar Animation Studios, offering young David a front-row seat for the creation of one of the late 20th century’s most successful entertainment companies. Among the lessons: It’s important to take a hands-on approach to matters large and small, and you don’t stop working on something until it’s great. He also learned from Jobs that while knowing how to negotiate is important, nobody goes to see deals—they go to see movies.

Ellison quickly proved to be both a deft dealmaker and producer. His first movie from a co-financing deal with Paramount was the western drama “True Grit,” a box office and critical smash that earned 10 Oscar nominations.

Ellison steeps himself in the details of a project and can talk about budgets, shooting schedules and marketing with expertise, said executives who have worked with Skydance on movies and television shows. He’s willing to pick up the phone to lobby for projects he cares about.

After the successful debut of “Reacher” on Prime Video in 2022, Ellison called Amazon Studios chief Jen Salke to make the case to order a series based on James Patterson’s Alex Cross novels. The project had been languishing there since 2020 and was starting to be pitched elsewhere. Ellison told Salke Amazon was making a mistake by passing on “Cross,” which he believed could be another “Reacher.” An hour later Salke called back and gave the series the green light, a person familiar with the conversation said.

A lasting business

With Ellison’s attention to detail comes grumbling from those he works with that he also can be inflexible in a business that often requires compromise. He doesn’t seem to distinguish between projects for which Skydance is a quiet financier versus a creative partner, some studio executives say.

Should Ellison’s deal to buy a majority stake in National Amusements work, it will give him power over an iconic studio and a vast library of films and TV shows. He will also have to determine the future of Paramount’s CBS broadcast network, a struggling cable business that’s home to MTV and Nickelodeon, and a 1,300-screen movie-theater chain.

Paramount’s next owner will also have to decide whether to keep pumping cash and content into its Paramount+ streaming service, which is battling much bigger and richer competitors.

In addition to the Ellison family, stakeholders in the closely held Skydance include private-equity firms Redbird Capital Partners and KKR as well as Chinese videogame and social-media company Tencent Holdings. Skydance said it surpassed $4 billion in value in 2022 after raising $400 million in new capital.

While the studio doesn’t disclose its results, people familiar with its finances say it has been profitable for several years, including 2023. Skydance missed its projected revenue last year, largely because of labor strikes that shut down the industry for months, but expects to meet its forecast in 2024 and 2025, the people said.

If Ellison fails to gain control of Paramount, Skydance may still look to acquire smaller production companies to enhance its portfolio, people close to the company’s investors said.

“No one should underestimate his commitment to building a lasting business,” said United Talent Agency partner Chris Hart.

Jessica Toonkel contributed to this article.
Write to Joe Flint at Joe.Flint@wsj.com

 

[wabbott]

https://www.msn.com/en-us/money/other/netflix-has-its-own-tough-act-to-follow/ar-BB1h1UiD

Netflix Has Its Own Tough Act to Follow
Streamer has advantage over rivals, but surging stock price has set expectations high
By Dan Gallagher

Jan. 21, 2024 - 10:00 am EST

To be Netflix these days is to occupy the strange dichotomy of being a company that has won the war but still has plenty of battles to fight.

Few dispute at this point that Netflix has won the streaming war. The company ended the third quarter with a little over 247 million paying subscribers—more than twice as many as the next-largest streaming company, Disney, claims for its core service.

That lead looks insurmountable at this point, and has officially triggered jockeying for how the runners-up will be sorted. Paramount is now entertaining merger discussions—with Max-owner Warner Bros. Discovery as just one possibility. Disney is looking at taking over all of Hulu that it doesn’t already own—as soon as it deals with a proxy challenge from a restive shareholder and a high-profile activist.

But to the victor might have gone too many spoils. Netflix shares have jumped 40% since the company’s strong third-quarter results three months ago, which also included the announcement of a price bump on certain Netflix streaming plans. That has some on Wall Street worried that even good results won’t prove good enough this time—the company plans to release results on Tuesday afternoon—and that even longer-term projections might be getting out of hand. Citigroup analyst Jason Bazinet downgraded the stock to a neutral rating on Jan. 9. “Across 2024 and 2025, the Street has lofty expectations for Netflix,” he wrote.

Analysts estimate that Netflix added 8.8 million paying subscribers in the fourth quarter—roughly the same as the prior period. That would equate to more than 17.5 million additions in a six-month period, which Netflix hasn’t done since the first half of 2020 with the onset of the pandemic. But the company was still amid the rolling out of its account-sharing program at the end of the third quarter, meaning it hadn’t yet prompted all password-sharing users to stop or buy in. That will likely help the fourth-quarter subscriber count, though the effects of that effort aren’t likely to be as strong in 2024.

Longer term, both account-sharing and advertising are expected to revive Netflix’s revenue growth even if subscriber growth slows. Analysts expect Netflix’s revenue to grow 14% this year and 11% next year, compared with 6% growth estimated for 2023. That outpaces projected subscriber growth of mid-single digits for those two years and reflects a bet that Netflix can use its commanding position to keep garnering more revenue per user.

Not an impossible task, but no slam dunk either. The one challenge Netflix shares with its streaming rivals is exposure to the labor strikes that crippled Hollywood for most of last year, delaying the release of shows and movies for fall of 2023 and beyond. The number of U.S. program premieres across distribution platforms fell 21% in 2023, according to a new report by market research firm Luminate. That looks likely to carry well into this year; Ampere Analysis reported Friday that the number of U.S.-produced scripted TV seasons ordered in 2023 slid nearly 37% from the previous year.

As a result, Netflix and its peers will have less new programming to draw new subscribers. And those subscribers are getting more selective. The Wall Street Journal reported earlier this month that monthly customer defections from streaming services rose more than a percentage point to 6.3% in November from a year earlier.

One big advantage Netflix enjoys over its traditional media rivals is an advertising business that has nowhere to go but up. During a presentation at the CES conference earlier this month, a Netflix executive said its ad-based tier now has 23 million monthly active users, compared with 15 million reported on Nov. 1. Disney, Warner and Paramount also offer ad-based plans, but those aren’t even close to offsetting the sharp drop in traditional TV advertising and cable fees those companies are experiencing.

But competition is picking up for Netflix in ads as well. Amazon is launching an ad-based tier for its Prime Video service at the end of this month. And, unlike Netflix, the ad-supported Prime offering will become the default for its viewers, with those wanting to remain ad-free having to opt into a new plan costing an additional $3 a month. Morgan Stanley estimates that will result in Amazon’s landing about 70 million U.S.-based advertising viewers—three times what Netflix has been able to accumulate globally in a little over a year—right off the bat.

The streaming war might just be moving to a new phase.

Write to Dan Gallagher at dan.gallagher@wsj.com

 

[Elijah Abrams]

I'm worried Nelson Peltz is going to win the proxy war with Disney and get seats on the Disney board, along with Ike Perlmutter and Jay Rasulo.

 

[wabbott]

https://deadline.com/2024/01/paramount-global-layoffs-february-1235798785/

Paramount Global Braces For New Round Of Layoffs
By Nellie Andreeva - Co-Editor-in-Chief, TV - @DeadlineNellie
January 21, 2024 - 4:30pm PST

EXCLUSIVE: Amid speculation about its future, Paramount Global is proceeding with a new wave of staff reductions in February, sources tell Deadline. I hear the cuts will impact hundreds of employees across the entire company.

For the past several days, there has been chatter that Paramount layoffs of about 800 are imminent. It followed a WSJ report in December that the company was mulling the potential elimination of more than 1,000 jobs in early 2024 to rein in costs. According to sources, the extent of the cuts will not be quite as big but the layoffs will be in the hundreds, affecting virtually every division. I hear senior executives have been given reduction targets to hit.

The layoffs will be implemented in February, I hear. No one is commenting and things are still in flux but Feb. 13 has been rumored as a potential target date. According to sources, the impacted employees may be asked to leave quickly after being notified, as quickly as within three days. If that is the case, it wouldn’t be unprecedented; I hear laid-off Paramount employees had a similar short window to depart following a round of cuts during the pandemic. A rep for Paramount declined comment.

Paramount — along with a number of other media companies — went through multiple rounds of cuts over the past 14 months. In November 2022, CBS Studios and Paramount TV Studios were impacted. In February, there were layoffs at Showtime. In May, the company proceeded to eliminate 25% of staff in its domestic cable networks and shutter its long-standing MTV News division after 36 years on air.

While the cuts are being contemplated, National Amusements, Inc., the Shari Redstone-led company that owns the majority of voting shares in Paramount Global, has reportedly been fielding acquisition offers. Apollo Global Management is among the companies that have reportedly contacted the investment bank advising NAI, BDT & MSD Partners; there also have been rumored overtures from Skydance Media and RedBird Capital.

NAI owns a portfolio of movie theaters as well as nearly 80% of voting shares.

Paramount, which was formed when Viacom and CBS reunited in 2019, has faced challenges related to pay-TV cord-cutting, a soft ad market, a loss-producing streaming operation and volatility in the movie business where it just scored a hit with Mean Girls. The company’s stock is now worth less than half of what it was when the merger closed.

 

[wabbott]

https://www.hollywoodreporter.com/business/business-news/netflix-earnings-preview-stock-1235789382/

Netflix Earnings Preview: Wall Street Crowns Its Streaming King, For Now
The streaming giant, which released such hits as 'Squid Game: The Challenge' in the final period of 2023, reports its fourth-quarter and full-year results on Tuesday.

January 22, 2024 - 7:35am
by George Szalai

Global streaming giant Netflix is gearing up to report its fourth-quarter and full-year 2023 earnings after the market close on Tuesday (Jan. 23), and its progress in building its advertising tier to scale and growth following a third-quarter gain of 9 million subscribers are among the topics in Wall Street’s focus.

Among the streamer’s big content launches of the final quarter of 2023 were the likes of Squid Game: The Challenge, new seasons of Lupin and Sex Education, the Money Heist spin-off Berlin, the conclusion of The Crown, awards season contenders, such as Bradley Cooper’s Maestro and Todd Haynes’ May December, Aardman Animation’s Chicken Run: Dawn of the Nugget and Zack Snyder’s Rebel Moon – Part One: A Child of Fire.

Some experts have raised their stock price targets heading into the earnings report amid positive investor sentiment, some forecasts that it will exceed the Wall Street average subscriber growth forecast of 8.8 million and some experts’ conclusion that Netflix has already won the so-called “streaming wars” and emerged as the clear “king” of the streaming world.

On the other hand, experts expect subscriber growth momentum to slow in the first quarter, Amazon is competing for the streaming advertising pie, and investors are looking for more color on the company’s gaming business strategy.

With that backdrop, Wall Street experts have shared their predictions for Netflix’s fourth-quarter earnings update. Here is a look at key analyst forecasts and commentary.

TD Cowen analyst John Blackledge, in a Jan. 9 report, boosted his Netflix stock price target by $65 to $565, based on his long-term forecasts, and stuck to his “outperform” rating. Investors will be “focused on net adds, ad tier and paid sharing” updates in the earnings report and management interview, he argued.

“We expect paid net adds of 9.03 million reflecting seasonality and a strong slate of fourth-quarter originals (management expects net adds to be similar to the third quarter),” Blackledge wrote. “Our latest annual ad buyer survey suggests a burgeoning ad opportunity for Netflix, while our consumer survey shows Netflix remains the top choice for living room viewing in the fourth quarter of 2023.”

The TD Cowen expert highlighted moves that should boost the ad tier. “Netflix in the fourth quarter also phased out their basic plan in six additional countries, which should help further drive adoption of the ad tier,” he explained.

Blackledge also cited results from a recent survey as positive for Netflix’s ad future. “We asked 50 ad buyers whether their largest client expects to advertise on Netflix in 2024,” he summarized. “On a spend-weighted basis, 50 percent expect to advertise on Netflix in 2024, while another 21 percent are unsure.” His takeaway: “We view the potential ad buyer adoption as positive for Netflix’s burgeoning ad tier.”

On Wednesday, Bank of America analyst Jessica Reif Ehrlich reiterated her “buy” rating, while raising her price target by $60 to $585 in a report entitled “Crowning the king in streaming.”

She outlined her take on the state of streaming this way: “It is becoming increasingly clear that Netflix has won the ‘streaming wars.’ Over the last 18 months, changing market dynamics, investor focus on profitability, and the various talent strikes have led several media companies to re-evaluate their streaming aspirations.”

Sector trends, including “reducing content spend/output, increasing third-party licensing,” have been “a tacit acknowledgment that not all media companies will be able to achieve Netflix’s global reach and scale in streaming,” Reif Ehrlich highlighted. “Overall, we believe that this is a win-win for the industry and Netflix. For Netflix, the availability to purchase third-party content will likely drive additional efficiencies with its content spend going forward as the company no longer needs to finance as much higher-risk new production and can supplement more concentrated ‘bets’ with well-known established content.” As evidence, she pointed to the fact that “the recent top 10 list from Netflix has been dominated by third-party content, underscoring the high hit rate that this content has on its platform.”

Reif Ehrlich is also optimistic on Netflix’s ad upside. “At the $6.99 price point, the ad-supported tier provides an attractive low-priced option for ‘borrowers’ who still wish to access the Netflix service,” she explained. “In our view, the broader crackdown on password sharing will be an accelerant to Netflix’s ad-supported tier.”

The Bank of America analyst said she remains “bullish on the longer-term opportunity” in AVOD for the streaming giant as “Netflix’s pricing strategy should drive scale and new bundling agreements (e.g., Netflix/Max) lower the retail price for consumers and decrease marketing spend and churn for Netflix.”

Meanwhile, Wells Fargo analyst Steven Cahall on Wednesday boosted his fourth-quarter subscriber growth forecast from 9.5 million to 10.4 million, based on the estimated impact of the company’s password-sharing crackdown and broader user trends. “We’re comfortable that net adds will top sellside’s consensus of around 9 million and buyside’s bogey of around 10 million,” he emphasized.

But the password-sharing crackdown’s benefit will slow down from here, the expert predicted. “We assume that paid sharing will be a diminishing benefit for the first half of ’24 as Netflix works into the later cohorts,” he explained. “We forecast +4.2 million for the first quarter ’24 versus +1.8 million in the first quarter of ’23. We assume that second quarter to fourth quarter ’24 net adds will be below ’23 levels as the paid sharing benefit dwindles.”

Given that the password-sharing crackdown’s impact seems quite clear by now, Cahall sees investor debates about Netflix’s growth and stock outlook “more muted” until the back half of 2024. The streamer’s ad push and its cost and benefit will likely be among the key topics for Wall Street, he predicted.

The analyst estimated that Netflix ended 2023 with 13 million ad-tier subscribers. “For U.S./Canada AVOD, 2 hours per day viewing x eight ad spots per hour x $30 cost per thousand x 30 days per month = $14 per month ad average revenue per user x about 2 users per account = $29 per month potential U.S./Canada account ad average revenue per user (ARPU),” he shared his math. “However, it’s running closer to $9 per month, reflecting (Microsoft ad unit) Xandr’s cut, frequency caps and lower sell-out due to limited reach.”

Cahall’s conclusion: “We think Netflix’s number 1 initiative for 2024 will be investing to grow ads longer-term.” He has an “overweight” rating and $460 price target on Netflix shares.

Evercore ISI analyst Mark Mahaney, who has an “outperform” rating with a $500 stock price target on Netflix, in a Jan. 11 report argued that signs of an acceleration in ad tier momentum “shows promise of scale.”

Netflix earlier in the month disclosed that it has reached 23 million global monthly average users (MAUs) for its ad-supported plan. “This suggests 8 million MAU adds quarter-over-quarter, accelerating from the 5 million per quarter growth cadence in the prior three quarters,” the expert noted. “Equally important is the consistent engagement levels that these AVOD subscribers demonstrate, with 85 percent of them streaming over 2 hours per day – which we believe is in line with the engagement level of the ad-free users.”

What will the ad tier users mean for Netflix’s fourth-quarter subscriber growth? Mahaney estimated that 23 million ad tier MAUs “equate to approximately 12-15 million subscriptions, or approximately 4-5 million gross adds contribution to the fourth quarter.” This suggests that the ad tier has reached roughly 5 percent of Netflix’s global subscriber base, he continued. “Not a significant number yet, but if this growth cadence continues, Netflix may well reach 50 million MAUs and close to 10 percent of its subs base by the end of 2024.”

Mahaney’s conclusion if that materializes: “Now we’re talking real scale which could catalyze more significant and permanent ad budget shift to Netflix. We believe AVOD brings Netflix incremental gross
adds and serves as a total addressable market expander and indirect pricing power booster.” And the Evercore ISI expected emphasized: “We believe that amidst the market’s laser focus on Netflix paid sharing benefits, this AVOD incrementality has been underappreciated by investors.”

On Monday, Mahaney noted that he forecasts global subscriber net additions of 8.2 million for the fourth quarter, compared with a Street-wide average estimate of 8.8 million. But he added that “we see modestly greater upside versus downside variance for the Street’s first-quarter net adds (4.3 million) given historical seasonality of relatively even fourth- and first-quarter net adds and our survey suggesting further paid sharing upside and potentially sustaining tailwind of AVOD upside.”

Meanwhile, MoffettNathanson analyst Michael Nathanson and his team boosted their fourth-quarter Netflix subscriber forecast, based on “the success of its password-sharing crackdown and its ad tier,” by 2 million to 10 million on Monday. “As a result of our improved estimates and a higher market multiple, we raise our Netflix price target by $50 to $440,” while sticking to a “neutral” rating, the expert wrote.

“This stronger-than-expected growth for the quarter is backed by fresh data from our friends at HarrisX bearing the surprising finding that, despite strike-impacted weak content slates, streaming increased its penetration of U.S. households after several quarters of either shrinkage or stalled growth,” Nathanson highlighted. “Though this could also perhaps be due to the fact that the strikes hit linear (TV)’s fall slate even worse. It seems Netflix’s growth has been relatively unperturbed by the strikes, though data from Nielsen indicates this may be due to the generosity (or desperation) of its competitors

Guggenheim analyst Michael Morris, who has a “buy” rating on Netflix and a stock price target that he had raised by $40 to $500 in early December, estimated slightly lower ad tier user gains in the fourth quarter than other analysts. He projects ad users to hit 7.7 million (for a 2.35 million net gain) as of the end of 2023, “versus consensus of 9.5 million (3.1 million net adds).”

He described Netflix’s engagement report for the first half of 2023 in a bullish way though. “Netflix is sharing detail on a significant leadership position relative to streaming competitors,” Morris argued. “We would expect it to be unlikely that any other streamer is seeing similarly large viewership levels and therefore will not share data en masse anytime soon.”

The Guggenheim expert, however, summarized Netflix’s challenge for the new year in the headline of his report: “With confidence high, how does Netflix delight investors in 2024?”

“We feel that the analyst and investor narrative has seen a 180-degree turn from the cautious interpretation of CFO comments in mid-September to crowning the company as an unassailable media winner into fourth-quarter earnings,” he concluded. “We share confidence in the Netflix model (content sourcing and distribution leader) and execution but also believe incremental progress on key initiatives (password sharing, advertising monetization) is key to further share appreciation. We also increasingly believe that a more robust sports media strategy that leverages reach leadership in conjunction with
high-profile, live content is an opportunity that the company should be seizing to fuel more growth.”

In contrast, Benchmark analyst Matthew Harrigan remains one of the biggest Netflix bears on Wall Street with a “sell” rating, even though he increased his stock price target by $75 to $425 on Friday, noting that this was “almost entirely off (generously) conceding to our market-linked valuation relative to the Nasdaq 100 rather than the S&P 500.”

“We are not perma-bears,” he wrote, but emphasized in his report’s headline: “Remain Cautious Despite Netflix Stock Price Breakout.”

Explained Harrigan: “We still feel Netflix’s long-term business characteristics are more akin to other large media companies as streaming for all entrants continues to cannibalize linear viewing, especially as advertising gains prominence, rather than the higher growth Nasdaq 100 technology companies. This currently contravenes market consensus.”

The analyst summarized his fourth-quarter expectations this way: “We do believe there could be upside to our 8.8 million member growth assumption to marginally above 10 million.”

Harrigan will look out for possible latest commentary from Netflix management on content strategy. “Netflix is showing improved cost discipline,” the Benchmark expert noted. “Netflix is now prioritizing quality rather than volume on a global basis, although it retains particular advantages in its foreign programming. It reduced the number of 2023 films and TV shows by around 130, a 16 percent decline after increasing output every year over the last decade, with particular acceleration in the second half of 2023 off the SAG and WGA strikes. It is also apparent Netflix is now more amenable to selectively licensing content, especially classic movies.”

Meanwhile, Michael Pachter, analyst at Wedbush Securities, a former Netflix bear, continues to see upside for the streamer. He has an “outperform” rating and $525 price target on the stock.

“Netflix remains on Wedbush’s Best Ideas List, given our view that the company can generate significantly more free cash flow than its guidance suggests,” he wrote in December. “We think Netflix has reached the right formula with global content creation, balancing costs and increasing profitability, while its password-sharing crackdown and eventually its ad-supported tier should further boost cash generation.”

Pachter summarized his take on Netflix’s recent push on those two fronts this way: “The primary takeaway from Netflix’s third-quarter earnings was that the password-sharing crackdown continued to drive new standalone subscribers who previously piggy-backed on others’ accounts, while the crackdown also added meaningfully to ARPU through Netflix’s ‘extra member’ option (where piggy-backers can remain on an account for an additional monthly fee). We think that the ad tier, while still dilutive to ARPU, is limiting typical churn and elevating overall subscriber numbers by offering prospective churners a lower cost option to remain subscribers.”

In terms of the streamer’s ad business outlook, the Wedbush analyst predicted: “As Netflix continues to add ad-tier subscribers, and as it increases its ad delivery rates, its ad-tier will also drive ARPU higher while continuing the limit churn.”

 

[HokieRaven5]

One for the Record Books: Texans at Ravens Delivers Nearly 32 Million Viewers, Becoming ESPN’s Most-Watched NFL Game Ever

ESPN’s NFL Divisional Playoff presentation was a record-shattering showdown for ESPN, marking consecutive years in which the final game of the season was its most-watched NFL game ever, playoffs or regular season, dating back to 1987 when ESPN acquired NFL rights. The record viewership joins Monday Night Football in cementing a landmark season for the NFL on ESPN.

With an audience of 31.8 million – based on Nielsen fast nationals – Houston Texans at Baltimore Ravens (ESPN, ABC, ESPN+ on Saturday, Jan. 20) surpasses the 2023 Super Wild Card Monday night game featuring the Dallas Cowboys at Tampa Bay Buccaneers (January 16, 2023) for ESPN’s top spot. Please note: ESPN’s audience is expected to elevate to more than 32 million when Nielsen reports final numbers this week.

The Texans-Ravens audience peaked at 36.2 million viewers in the third quarter (6:30 – 6:45 p.m. ET).

ESPN’s Five Most-Watched Games Ever Have Aired in Previous 13 Months; Multiple Monday Night Football Games Amongst the Records
With the addition of this season’s ESPN’s Super Wild Card Monday night game (Eagles at Buccaneers), ESPN’s three most-recent playoff games are also its three most-watched NFL games ever.

Inclusive of all NFL games, regular season and playoffs, ESPN has aired its five most-watched NFL games ever in the past 13 months (January 2023 to January 2024) and six of the seven highest-viewed games, buoyed by a record-setting 2023 Monday Night Footballseason.

ESPN’s Most-Watched NFL Games Ever, Dating Back to 1987

Rank	NFL Season	Date	Game	Viewership	Monday Night Footballor Playoff Game
1	2023-24	January 20, 2024	Houston Texans at Baltimore Ravens	31,767,000	Playoff
2	2022-23	January 16, 2023	Dallas Cowboys at Tampa Bay Buccaneers	31,201,000	Playoff
3	2023-24	January 15, 2024	Philadelphia Eagles at Tampa Bay Buccaneers	29,132,000	Playoff
4	2023-24	November 20, 2023	Philadelphia Eagles at Kansas City Chiefs	28,962,000	Monday Night Football
5	2023-24	December 25, 2023	Baltimore Ravens at San Francisco 49ers	27,616,000	Monday Night Football
6	2019-20	January 4, 2020	Buffalo Bills at Houston Texans	26,972,000	Playoff
7	2023-24	December 30, 2023	Detroit Lions at Dallas Cowboys	26,061,000	Monday Night Football

All ESPN produced Games. All games aired on, at least, ESPN and ABC, except Christmas Day game which was only on ABC.

The streak of most-watched games coincides with the implementation of the newest rights agreements between ESPN and the NFL, as well as Joe Buck and Troy Aikman joining Monday Night Football.

Texans-Ravens is Disney’s Most-Watched NFL Game Outside of Super Bowls
The Texans-Ravens’ 31.8 million viewers also marks Disney’s most-watched NFL game, excluding Super Bowls. The audience of 31,767,000 viewers bested all 24 Disney NFL Playoff games in the previous 28 years, including 14 exclusively on ABC (1996-2005), nine available on ABC and ESPN (2016-23) and one solely on ESPN (2015). The game also surpassed every regular season game exclusively on ABC since 1996.

Please note: Disney’s ownership of ABC/ESPN began February 1996
Disney has aired Super Bowl XXXIV, Super Bowl XXXVI, and Super Bowl XL.

Texans-Ravens to Potentially Best All Early Divisional Playoff Games Dating Back to 2015
Looking across all networks, with its current viewership (31.8 million), ESPN’s game already surpasses every Divisional Saturday early game window (4:30 p.m.) dating back to 2015, except last season’s (Jaguars-Chiefs, 32.3 million). ESPN could surpass that viewership as well, needing only to boost its audience by 2% (500,000 viewers).

Playoff Success Cements Record Year for ESPN
ESPN’s record-breaking playoff viewership follows a history-making fall for Monday Night Football viewership. The 2023 Monday Night Football season is the franchise’s most watched since the 2000 NFL season, with viewership surpassing each of the previous 18 seasons in the ESPN era (2006 – present) and the five seasons leading into that era when MNF aired singularly on ABC. The franchise was up 29% year-over-year.

 

[wabbott]

https://finance.yahoo.com/news/blackwells-capital-files-preliminary-proxy-212000723.html

Blackwells Capital Files Preliminary Proxy Statement for Disney’s 2024 Annual Meeting

Blackwells Capital LLC
Mon, Jan 22, 2024, 3:20 PM CST

Blackwells Capital LLC

Jessica Schell, Craig Hatkoff and Leah Solivan will Support Disney’s Transformation by Adding Expertise That is Currently Lacking

Reiterates Demand That Trian Immediately End its Campaign; Invites Ike Perlmutter to Meet with Blackwells Nominees

Demands Disney Share Information Equally with All Shareholders, Not Just ValueAct

NEW YORK, Jan. 22, 2024 (GLOBE NEWSWIRE) -- Blackwells Capital, a shareholder of The Walt Disney Company (“Disney” or the “Company”) (NYSEIS) last week filed a preliminary proxy statement with the Securities and Exchange Commission (“SEC”) in connection with its nomination of three highly qualified candidates – Jessica Schell, Craig Hatkoff and Leah Solivan – for election to the board of directors of Disney (the “Board”) at the Company’s 2024 annual meeting of shareholders (the “2024 Annual Meeting”).

Shareholders are faced with three competing candidate slates at the 2024 Annual Meeting – Disney’s, Trian’s and Blackwells’. In our view, only Blackwells’ highly qualified candidates are in a position to support Disney’s transformation efforts, adding expertise that is demonstrably lacking, while making sure the Disney Board doesn’t become a forum for personal grievances and reckless behavior. Moreover, Disney’s preliminary proxy statement paints a picture of a Board focused less on transforming the Company and more on preventing contrarian viewpoints and expertise from entering the boardroom.

Jason Aintabi, Chief Investment Officer of Blackwells, said, “According to Disney’s own preliminary proxy statement, Mr. Peltz has requested on behalf of Trian a seat on Disney’s Board no less than 24 times in the last year and a half. During that time, Mr. Peltz has not offered a single strategic idea that would benefit shareholders. Astoundingly, Mr. Peltz recently claimed that he would like ‘a guy who doesn’t have media experience’ on the Disney Board. We remind Mr. Peltz that Disney is a significant media company and, now more than any time in its history, needs Board members with deep media experience. Blackwells’ nominee, Jessica Schell, has more media experience than the Trian nominees combined, and would bring a critical perspective that is missing from the Disney Board.”

“We also invite Ike Perlmutter, who represents the vast majority of the Trian shares of Disney, to engage with Blackwells with regards to our investment thesis for Disney, and to meet with our nominees. Mr. Perlmutter can then consider that our nominees will provide critical support in the areas of media and content, technology and real estate – the latter of which we believe represents up to 50% of the entire market value of Disney, and where, underwhelmingly, Disney has no such expertise on its Board. Additionally, with unprecedented innovation in AI, VR and AR, and more, Disney will benefit from Ms. Solivan’s experience in these fields, which is underrepresented on the current Disney Board.”

In listening to the views of Disney shareholders since the time of Blackwells’ first public engagement on Disney late last year, there has been an increasing desire by shareholders for additional support to Disney’s Board, provided it consists of additive expertise and constructive collaboration with existing Board members. The Disney Board has no shortage of issues to resolve, or courses to chart during this transformative time. Additional expertise should be welcomed, not brushed aside.

Mr. Aintabi concluded, “The Disney Board should promptly meet with the Blackwells nominees, in order to promote the free-flowing exchange of ideas that comes with constructive collaboration. On a related note, we remain particularly disappointed that Disney has entered into an information sharing agreement with ValueAct. Disney’s share price already suffers from a significant information discount, as recently noted by several key market analysts. Showering one shareholder with information that is withheld from all other shareholders, will only make matters worse. We therefore also demand that Disney agree to make public all information that is shared with ValueAct under the so-called ‘information sharing agreement’.”

About Blackwells Capital

Blackwells Capital was founded in 2016 by Jason Aintabi, its Chief Investment Officer. Since that time, it has made investments in public securities, engaging with management and boards, both publicly and privately, to help unlock value for stakeholders, including shareholders, employees and communities. Throughout their careers, Blackwells’ principals have invested globally on behalf of leading public and private equity firms and have held operating roles and served on the boards of media, energy, technology, insurance and real estate enterprises. For more information, please visit www.blackwellscap.com.

 

[PolymerSkywalker]

I'm worried Nelson Peltz is going to win the proxy war with Disney and get seats on the Disney board, along with Ike Perlmutter and Jay Rasulo.

Why does that worry you? If that occurred it likely would signal much better decisions in the future as far as the stock price is concerned.

I mean Disney has underperformed the S&P 500 for the last 1 year, 5 year, and 10 years. I mean if it were going incredibly well I get the concern, but it’s currently underperforming.

 

[Elijah Abrams]

Why does that worry you? If that occurred it likely would signal much better decisions in the future as far as the stock price is concerned.

I mean Disney has underperformed the S&P 500 for the last 1 year, 5 year, and 10 years. I mean if it were going incredibly well I get the concern, but it’s currently underperforming.

Pelts will just end up replacing Iger with himself, and he is a person that's not on the creative side of things. I'm also worried Peltz will force the three sides of Disney (Entertainment, Parks, and ESPN) to be spun off into separate companies under different ownership and even sell off ABC and Disney Channel.

 

[RivShore]

Pelts will just end up replacing Iger with himself, and he is a person that's not on the creative side of things. I'm also worried Peltz will force the three sides of Disney (Entertainment, Parks, and ESPN) to be spun off into separate companies under different ownership and even sell off ABC and Disney Channel.

I don't think there is any way any of the outsiders get voted onto the board but assuming a Peltz did, he would just be one vote on a board of 12, how could he possibly initiate major changes like that with just one vote?

 

[clarker99]

'WWE's 'Raw' to stream on Netflix starting in January 2025​

https://www.msn.com/en-us/entertain...-netflix-starting-in-january-2025/ar-BB1h8cXg

WWE's flagship weekly program "Raw" will stream live Monday nights on Netflix beginning in January 2025.

The deal, announced Tuesday, is worth more than $5 billion over 10 years.

As part of WWE's deal with Netflix, the streamer plans to develop scripted television and films from the wrestling promotion's intellectual property.

"In its relatively short history, Netflix has engineered a phenomenal track record for storytelling," said WWE president Nick Khan. "We believe Netflix, as one of the world's leading entertainment brands, is the ideal long-term home for Raw's live, loyal, and ever-growing fan base."

WWE's monthly premium live events are currently streamed on Peacock, part of NBC Universal, USA Network's parent company.

WWE and UFC are part of TKO Group Holdings Inc., a publicly traded company.'

--------

Netflix has entered the Live TV space.

 

[wabbott]

https://seekingalpha.com/news/40575...-2_11-misses-0_11-revenue-of-8_83b-beats-120m

Netflix GAAP EPS of $2.11 misses by $0.11, revenue of $8.83B beats by $120M
Gaurav Batavia

Netflix press release (NASDAQ:NFLX): Q4 GAAP EPS of $2.11 misses by $0.11.

• EPS includes a $239 million non-cash unrealized loss from F/X remeasurement on our Euro denominated debt (due to the intra-quarter depreciation of the US dollar against most currencies).

 

[wabbott]

https://s22.q4cdn.com/959853165/files/doc_financials/2023/q4/NEW-FINAL-Q4-23-Shareholder-Letter.pdf

News release

 

[wabbott]

https://www.hollywoodreporter.com/business/digital/netflix-q4-earnings-2023-1235804918/

The streaming giant reported 13 million new subscribers, with revenue of $8.8 billion and operating income of $1.5 billion. The company had reported 9 million new subscribers last quarter, as its crackdown on sharing passwords continued.

 

[clarker99]

A year ago Netflix looked stuck and revenue/OI were trending down. Today they posted record revenue and OI for FY23. Very impressive turnaround.

The lockdown of account sharing has lead to an INCREASE in ARPU and Subs meaning people are mostly signing up brand new accounts and not just adding family add-ons to existing accounts. Disney will have learned a lot from Netflix on that strategy.

Netflix makes $16.64/mo per user in North America while Disney+ only makes $7.50/mo per user as per last report.

 

[HokieRaven5]

Netflix makes $16.64/mo per user in North America while Disney+ only makes $7.50/mo per user as per last report.

Yup, D+ still underpriced and looks to have room for future increases.

 

[fatmanatee]

Underrated part of this story is that IMO Netflix's library is significantly better than it was a few years ago. Saying this as someone who had cancelled and got it back because it's offered for free as part of T-Mobile service. Looking at their subscriber numbers it looks like I'm not the only one who had bailed.