The Walt Disney Company is facing renewed debate over the future of its streaming business, with one Wall Street analyst arguing the company should exit content distribution and return to focusing on content creation, according to Forbes.
The proposal comes as Disney explores new strategies to strengthen its media business amid growing competition and changing consumer viewing habits.
Analyst Suggests Exiting Streaming Distribution
According to Forbes, Wells Fargo analyst Steven Cahall believes Disney could unlock significant shareholder value by moving away from operating streaming platforms such as Disney+ and Hulu.
Instead, the company could generate higher revenues by licensing its films and television content to multiple distributors.
Cahall estimates that Disney’s library and new releases could generate up to $15 billion annually through a broader licensing strategy, while potentially boosting the company’s share price by as much as 40%.
Disney May Expand Distribution Instead
Forbes reports that internal discussions point toward a different direction.
Rather than reducing its role in distribution, Disney is reportedly evaluating broader streaming bundles, expanded live television offerings and even making selected content available for free on competing platforms.
The company has already merged Hulu + Live TV with Fubo after acquiring a majority stake, creating new opportunities to offer bundled television services.
Another option under consideration would allow Disney’s platforms to distribute third-party streaming services, following a model already used successfully by Amazon.
Streaming Competition Intensifies
The debate reflects wider challenges facing the streaming industry.
According to Forbes, although Disney’s streaming operations have become profitable, competition remains intense from companies including Netflix, YouTube and Peacock.
Rising subscription prices and increasing consumer sensitivity to entertainment spending are prompting media companies to explore new business models, including ad-supported content and broader content partnerships.
As new CEO Josh D’Amaro evaluates Disney’s long-term strategy, investors are closely watching whether the company will double down on streaming or place greater emphasis on monetizing its extensive portfolio of films, television content and intellectual property through alternative distribution channels.
Photo: CNBC
