Mickey Mouse Scares Netflex

Mickey Mouse trying to scare Netflex

Could Disney (DIS) challenge Netflix, which has 158 million subscribers, for its streaming crown?

Disney + Launched in November for U.S. customers, has experienced explosive subscriber growth, much to the surprise of stock analysts trading options. The new Disney streaming service had 10 million subscribers within 24 hours, roughly 3% of Netflix’s Global subscriber count, adding 1 million per day thereafter.

Streaming Wars

Verizon is going to give Disney it’s 90 million accounts. With Verizon giving Disney + away for free, this means Verizon customers can feel free to keep paying for Netflix while having access to Disney +, and Disney gets less money per subscriber than it would through a traditional enrollment. Netflix is thanking Verizon for making this easy on their customers and a Netflex target to make money in options.

 Meanwhile, Apple is giving away Apple TV+  to purchasers of new iPhones, Mac and Apple TV devices. Apple just made sure that hundreds of millions of Apple buyers can stay with Netflix, because Apple TV+ won’t cost them anything for the first year. Another opportunity for option traders with Netflex.

House of Mouse Structure

Disney+  is completely different from Netflix. Crucially, it owns its Content Library.  While Netflix has invested billions of dollars into original content, it owns only a tiny fraction of its Library. With 95% of its Content Library licensed from outside sources. Netflix is reliant on its external partners, and this has become a serious problem for Netflix. Netflix is racing against time.

Disney appeals to a lot of grown-ups, who are also stock option traders. The Mandalorian has many adult fans. The main difference between Disney+ and Hulu ( which together are really the true Netflix competitor) is that Disney+ won’t have R-rated stuff that is inappropriate to the Disney brand. R-rated content will go to Hulu, that’s why Disney bought Hulu. That doesn’t mean grown-ups don’t like G and PG stuff every so often. Some adults don’t like R-rated content at all.

Barb’s Takeaway

Among streaming plays, stock option traders may be well-served betting on Disney+. Disney’s robust financial resources and vast Content Library will give it a distinct advantage in the streaming Wars to come. 

Disney dividend declaration and increase is coming now in December. Box office receipts for Frozen 2 will reach $3 billion by December 2020. Good time to be a Disney shareholder; maybe a $200 price target for Disney and also a stock option opportunity.

Are You a Bull or a Bear ??

Date: December 3, 2019 –Stock: Disney (DIS) –Share price closed @ $148.58

If you’re a Bullish Mom and think Disney will go up, try the January 17, 2020 Expiration Date – CALL $145.00 Bid;  and $140.00 Ask strike prices.  Premium is $3.75 (mid @$3.55) debit to pay = Long Call Vertical Spread on  www.TDAmeritrade.com —- P.S. Take a look at the January Open Interest !

On the other hand, Mom, if you think Disney is bearish and will go down, try the Expiration Date: January 17, 2020 – PUT $145.00 Ask;  and $140.00 Bid strike prices. Premium is $1.54(mid @$1.43) debit to pay = Long Put Vertical Spread on www.TastyWorks.com

 Let’s empower all of us Moms and Dads to Face Down the Wall Street bull!

Let's keep in touch, Barb

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s