Disney+
- to launch 191112, first in US, near-global after 2 yr
- 7 $/mo, 69 $/yr, ad-free (number of screens: unknown)
- downloads for offline viewing, parental controls, personalisation, supports 4K & HDR
- portfolio
- at launch: 7500 past episodes, 25 original series, 10 original movies/specials, 400 library movies, 100 recent movies
- growing to in yr 5: 10k past episodes, 50 original series, 10 movies/specials, 500 library movies, 120 recent movies
- to include all 2019 film releases after theatrical & home entertainment windows close; plans original series from Marvel, Star Wars, Pixar, Disney Animation, NatGeo
- targets 60-90m subs YE 2024 (o/w 1/3 in US long term)
- expenses
- original content spending $1b in 2020 (amortisation $500m), growing to $2.5b (for 50 originals) in 2024 (amortisation $2b)
- licensed content expense $1.5b in 2020, $2.5b in 2024
- operating expenses $1b in 2020, peak losses in 2020-2022
- profitability by 2024
- considers discounted bundle with ESPN+ & Hulu
Hulu
- 25m subs
- ad-free 12 $/mo or limited ads 6 $/mo; Live TV tier 45 $/mo
- targets 40-60m subs YE 2024
- peak operating loss $1.5b in 2019, profitability in 2023/2024
- plans international expansion
ESPN+
- 2m subs
- limited ads 5 $/mo or 50 $/yr
- targets 8-12m subs YE 2024
- operating loss $650m in 2019 & 2020, profitable by 2023
- plans international expansion
Hotstar
- 300m MAU
- free+ads or premium
- in Asia
Offer
- For 21st Century Fox: $52.4b in stock; 515m new DIS shares = 25% pro forma; 0.2745 DIS for 1 FOX; plus $13.7b debt (equity value 52.4b, enterprise value 66.1b)
- Targets $2b cost savings from efficiencies
- Iger remains Chair/CEO through 2021
- Prior to offer:
- to spin off Fox Broadcasting Co, Fox TV Stations, Fox News, Fox Business, FS1 & FS2, Big Ten Network in newly listed company New Fox (2017E rev $10b, EBITDA $2.8b), to pay $8.5b dividend for tax liability of spin-off
- Fox to close the buy out of 61% of Sky prior by 180630
- To be acquired:
- TV studios 20th Century Fox TV, FX Productions, FX21.
- Film studios: 20th Century Fox, Fox Searchlight, Fox 2000
- cable entertainment networks
- international TV businesses
- Fox Networks International (>350 channels in 170 countries)
- Star India (69 channels in >100 countries)
- Sky (23m subs in 5 countries)
- stakes in Roku, Endemol Shine, Hulu (to be controlled), Tata Sky
- titles/franchises: X-Men, Fantastic Four, Deadpool, The Simpsons, Avatar, NatGeo
Rationale
- Disney
- complement & enhance (earlier content deals: Lucasfilm, Pixar, Marvel)
- stronger D2C offerings (Hulu, planned SVOD services Disney & ESPN), control of Hulu
- efficiencies
- Fox: focus
- first split News (newspapers) off to create 21st Century Fox
- next split New Fox (TV channels US) off to sell 21st Century Fox to Disney
- Studio majors remaining:
- Walt Disney: Disney, Lucasfilm, Marvel Studios, Pixar, Walt Disney Animation, Touchstone, 20th Century Fox, Fox Searchlight, Blue Sky, Regency
- Time Warner: Warner Bros, New Line, Cartoon Network, Castle Rock
- Comcast: Universal, Focus Features, Working Title, Gramercy, DreamWorks Animation
- Sony: Sony Pictures, Columbia Pictures, TriStar
- Viacom: Paramount Pictures, Nickelodeon
