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Netflix Stock – Disney‘s (DIS) Media Deal With NHL to Aid Streaming Growth

The Walt Disney‘s DIS latest seven-year media rights deal with The National Hockey League (“NHL”) is set to accelerate the former’s plan to evolve as a streaming power house.

The media giant has been focusing on its direct-to-consumer business that comprises of Disney+, ESPN+ and Hulu (forms Disney bundle) to tackle disruptions caused by the coronavirus pandemic in its movie production, theme parks and cruise businesses.

The company’s popular streaming service, Disney+, has already gained significant traction by garnering more than 100 million paying subscribers within a short span of 16 months (since its launch in November 2020) despite stiff competition from the likes of Netflix NFLX and Amazon AMZN Prime Video.

The latest NHL deal now expands Disney’s sports content portfolio. Markedly, after a gap of 16 years, the popular hockey league is returning to Disney with the upcoming 2021-2022 season. NHL’s current 10-year broadcast deal with Comcast’s CMCSA NBC expires at the end of the 2020-21 season.
 

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The Walt Disney Company price-consensus-chart | The Walt Disney Company Quote

 

Per a latest Reuters report, more than 1,000 NHL games each season will be available on ESPN+. Moreover, ESPN and ABC will get 25 exclusive national regular-season games each season, while 75 games will be exclusive to ESPN+ and Hulu per year. Further, under the agreement, ABC will exclusively cover the Stanley Cup final in four of the seven years.

Strong Content & Cross-Promotional Deals to Aid User Growth

Apart from robust content, Disney’s cross-promotional strategy with its streaming services is also expected to drive subscriber growth.

Notably, beginning Mar 10, Hulu started offering access to ESPN+ sports programming directly in the Hulu app. Markedly, users need to buy ESPL+ add-on ($5.99 per month) or Disney bundle (which will cost $13.99 monthly from Mar 26) to access ESPN+ on the Hulu app.

Moreover, per Variety, Hulu subscribers – who are also ESPN+ customers – will be able to purchase and watch ESPN+ pay-per-view events (including UFC) this summer.

Markedly, as of Jan 2, 2021, ESPN+ had 12.1 million paid subscribers while Hulu had 39.4 million. Including Disney+, Disney had 146.4 million total streaming subscribers. Expanding content portfolio is expected to further drive subscriber growth in the near term.

In fact, Disney now expects to see between 230 million and 260 million subscribers on Disney+ by 2024, which basically triples its prior guidance of reaching between 60 million and 90 million subscribers by 2024.

Moreover, Hulu (including Hulu+ Live TV service) is expected to garner 50-60 million subscribers by the end of 2024 while ESPN+ is expected to reach between 20 million and 30 million subscribers. Across its streaming services including Hulu and ESPN+, Disney forecasts 300-350 million subscribers by 2024.

Disney plans to spend $14-$16 billion in global direct-to-consumer content expenses across Disney+, Hulu and ESPN+ in fiscal 2024 as it ramps up original series and films. The company plans to release 100 new titles per year that include 10 Marvel series, 10 Star Wars series, and 15 Disney live-action, Disney Animation and Pixar series along with an equal number of films, each.

Additionally, Disney plans to reopen its California theme parks with limited capacity in late April. Moreover, the Zacks Rank #3 (Hold) company can resume some of its cruise operations in the fall. Both plans, if materialize, will boost Disney’s top-line growth in fiscal 2021. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Netflix Stock – Disney‘s (DIS) Media Deal With NHL to Aid Streaming Growth

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