Disney Takes Aim At Netflix

Catch up with this week’s Five on Friday!

#DisneyPlus

Disney has finally revealed the details of its long-awaited streaming service, Disney Plus, and it looks as exciting as we expected.

What does this mean?

In a presentation for investors last night, company CEO Bob Iger unveiled the new subscription service that will be anchored by roughly 500 films from Disney’s library and 7,500 episodes of old Disney-branded television shows. In addition to this incredible back-catalogue, Disney Plus will also offer 10 original films and 25 original series — including three ‘Avengers’ spinoffs — in its first year, plus shows that have been newly acquired from Fox like all 30 seasons of ‘The Simpsons’. In contrast to Apple’s streaming announcement a few weeks ago, Disney was hot on the details of this new service. Its planned launch is for November 12 in the US and next year for Europe and Asia, with the subscription price costing $7 per month, easily below the cheapest Netflix subscription price. At the presentation, Iger was bullish on the future success of Disney Plus, emphasizing Disney’s “strength, confidence and unbridled optimism” in the space. It certainly won’t be a cheap project for the Disney empire, however, with at least nine high-budget movies reportedly in production for Disney Plus.

#BezosLetter

Jeff Bezos published Amazon’s annual shareholder letter yesterday in which he warned that “multibillion-dollar failures” will lie ahead for the company owing to the sheer size and diversity of businesses.

What does this mean?

Bezos pointed out the fact that Amazon Echo and the Amazon Fire phone were created around the same time using a similar amount of resources, but only the Echo succeeded. “We will work hard to make them good bets, but not all good bets will ultimately pay out,” he wrote. He also challenged rivals to match Amazon’s recently hiked minimum wage of $15 per hour, prompting an irate response from a Walmart executive: “Hey retail competitors out there (you know who you are) how about paying your taxes?” Thanks to its engaging style, Bezos’s annual letter is widely considered — along with Warren Buffett’s — to be one of the best in the business. Indeed, Bezos offered insights this year into the innovation that takes place behind Amazon’s walls, nicely summarised in the following image: “A builder’s mentality helps us approach big, hard-to-solve opportunities with a humble conviction that success can come through iteration: invent, launch, reinvent, relaunch, start over, rinse, repeat, again and again.”

#Uber

Uber has published its S-1 filing ahead of its planned IPO, revealing that the company expects operating expenses to “increase significantly” in the months ahead.

What does this mean?

In what is arguably the most anticipated public listing of the year, this glimpse into the Uber’s financials paints a vivid picture of its current health. The filing shows that Uber pulled in revenues of $11.27 billion in 2018, but still reported an overall loss of $3 billion in the year. In terms of user numbers, the company reported “Monthly Active Platform Consumers” — or MAPCs — of 91 million in the fourth quarter of 2018. These are counted as users who take at least one ride on Uber or buy at least one meal on Uber Eats and is up 35% from the year before, reflecting slowing growth from the 51% increase reported a year earlier. Uber is expected to list on the NYSE in May with plans to sell around $10 billion worth of stock at a valuation of between $90 billion and $100 billion. This is a slight reduction on the $120 billion valuation that the company was reportedly targeting previously, with expectations perhaps tempered by the poor performance of industry-rival Lyft since IPO’ing last month.

#PinterestIPO

In a big week for IPO news, social network Pinterest set a price range of between $15 — $17 per share for its own flotation, valuing the company below its last private-market price of $12 billion.

What does this mean?

Following the poor performance of Lyft’s IPO, Pinterest seems to be taking a more conservative approach to its listing. At the top range of this pricing, the company would be valued at $11.3 billion, below the $12 billion mark it was last valued at in 2017. Still, this would put the company at 15 times the amount of revenue it earned last year ($755 million). Founded in 2010, more than 250 million now use Pinterest a month to ‘pin’ images to their personal boards. The company, which derives most of its revenue from advertising sales, reported a loss of $63 million last year, though an unprofitable company going public isn’t exactly a new phenomenon (see Uber above). However, the big challenge for Pinterest will be how it competes against more established players in the social media landscape. For example, Instagram — the current undisputed leader in image-based media — has about 1 billion monthly active users, with 500 million of those using the platform every day. Talk about tough competition.

#AndFinally

In the latest phase of society’s veganization — sometimes called the “bloodless revolution” — it seems we are witnessing the rise of meat-free burgers. On April 1st, in a move that was initially believed by some to be an April Fools’ joke, Burger King announced the release of its all-new meatless Impossible Whopper. Working closely with Silicon Valley-based Impossible Foods, the fast food giant’s latest offering is entirely composed of secret plant-based ingredients, and even “bleeds” like a regular burger (perhaps not so bloodless, then). But what about the taste? Well, according to company executive Christopher Finazzo “virtually nobody can tell the difference.” As might have been predicted, other big players in the space immediately faced calls from activists to reproduce Burger King’s success. So far, hundreds of thousands of people have signed a petition demanding that McDonald’s add similar vegetarian protein options to its menu. The company actually did release a limited-run item called the McVegan last December, but the results were far from impressive. This time, they’ve kept eerily silent.

What does this mean?

It remains to be seen if the Impossible Whopper will convert the carnivores amongst us, or if it will take its place alongside the McPizza in the dustbin of fast food history.

The Week In Numbers

3

SpaceX rockets were launched and successfully landed on Thursday in the company’s first day of revenue-generating flights.

4,500

Amazon employees urged the company this week to take more aggressive action in reducing its carbon footprint.

$7.1 billion

was how much Wynn Resorts reportedly planned to spend on acquiring Australian casino operator Crown Resorts this week before the deal fell spectacularly apart.


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MyWallSt operates a full disclosure policy. MyWallSt staff may hold long positions in some of the companies mentioned above.