10. Disney vs. Netflix - The True Live Entertainment Behemoth

Hugh Sifu: [00:00:00] Hey guys. Thanks for listening to Thoughts of a Random Citizen. I wanted to remind everyone that the ideas expressed in the show are just thoughts from random citizen. While I do have my areas of expertise and do my best to research thoroughly before each episode, this podcast is designed to stir conversation and provoke your mind. These are just thoughts that pop in and out of the head of an everyday citizen. Please keep that in mind when listening and understand that facts and logic rule the day. Thanks for keeping an open mind and happy listening.

All right, guys. Welcome back to Thoughts of a Random Citizen. I'm your host, Hugh Sifu. Hopefully you guys have had a good few months to start your year. Time definitely goes a lot faster when you're older. It's insane, but anyways, I am still chilling in Tasmania and I stand by my original statement this is hands down the best place in Australia that I've visited thus far, which I've pretty much visited everywhere besides Queensland. Pretty amazing. If you had a chance, please go visit. Also just had a thought earlier, completely random. I was taking a- [beeping sound] in the woods and I thought, the old saying does a bear shit in the woods? Then I thought of the old saying does a tree make a sound if it falls, if no one's around to hear it.

Then I think I figured it out. It doesn't make a sound because no one's to hear it and what a definition of a sound is “something that is heard” but it does make a noise. Not a sound, but a noise, different words but I think that's the riddle. Is that a well-known thing? Has everyone already figured that out? [00:02:00] Or I don't know. Did I figure it out or am I just retarded and didn't make sense there? Anyways, food for thought, I didn't research any of that, but I'm assuming that that makes sense. To the podcast.

Today I wanted to highlight a specific stock Disney and the reason I'm highlighting a specific stock and I like so much to talk about stocks because I think that it's very easy to beat the S&P 500 and yes if you don't want to deal with it and you don't enjoy researching stocks and managing your own money like I do then just buy an ETF or the S&P 500 and write it out. I don't really like doing that. Considering the S&P 500 just bought Tesla at anywhere from like $600 to $800. I think that's no Bueno. I really think that everyone should be in charge of their own money and putting it in places that they actually do research on. Having said that, you can obviously make a steady return over the years in good ETFs and index funds. Back to Disney.

The reason I'm highlighting this stock is because I think that it is going to be a behemoth in the future in a category of live entertainment. Disney, obviously, as everyone knows before Disney+ AKA before the pandemic I guess it was a bit before the pandemic anyways, but it really took off. Disney was primarily a theme park. [00:04:00] Obviously, they have some small cinema presence. I wouldn't say small, I guess, but it's definitely grown in the past few years. On top of that, they are heavily into cruises.

What does that mean? That means come pandemic time, they should have gotten destroyed, but what did they not do? Get destroyed. Why? One, leadership, but two, it's because they have an excellent streaming service that has a vast library that it will, in my opinion, destroy Netflix. It will destroy Netflix. Don't get me wrong, netflix will be around and blah, blah, blah but what is one thing that we know Netflix has done in the past five years, release a bunch of shit.

I don't know about you guys, but if I see something with a Netflix in on it, I just skip over it because it's garbage, their content is utter trash. That's just my opinion, but it's just not good. I know you could be thinking, "Oh. what about, you obviously are on Netflix." No. I have family who has Netflix and I deleted my own account. If they delete their account, I will be completely fine. I hardly ever watch it. I rewatch funny seasons like I think I'd talked in an earlier episode, How I met your mother is what I just watched. I like New Girl. I like The Office. I like Friends. I like Parks and Rec. I was watching those over and over again. Whenever I have the urge.

Other than that, I don't really get on Netflix, [00:06:00] but getting away from the fact that I really don't think that Netflix's content is great and their model of having to consistently release new stuff and them being such a consolidated entity it's difficult, but what do we have from Disney? Not only that but Disney+, the live entertainment giant. Let's just dive into it briefly. Then we'll wrap up how I think that they're going to rebound and they are still very undervalued.

Disney, if it goes to a price war with Netflix, will I think steamrolled them considering not only the vast library but their main income is derived from cruises, parks, everything else outside of what Disney+ is. They were a $240 billion market valuation in 2019 before the pandemic. Disney+ was slightly valued in there. Even if you go back to 2018, $60 billion difference, 170 valuation, $70 Billion difference. It's still a very large company that gets its money from a lot of other places that if it does go to a pricing war with Netflix, it will be all right, I think.

Let's just go into what Disney's streaming will include. Disney has the Disney channel and its vast kid show library, which parents will get their kids, especially if they don't have to show their kids the garbage content that isn't really family-oriented [00:08:00] on Netflix. Not only that but they just acquired Star Wars. They have Pixar and Marvel, but that's their main Disney+. What else do they have to offer streaming-wise?

They also own ESPN, ABC, Lifetime, History, A&E, and FX. It's also a majority owner of Hulu. That's a lot to fall back on, but wait, there's more. They also just acquired 21st Century Fox in 2019. Through that, they acquired National Geographic. If you'd like the Muppets, they have that too. They have everything that you've ever known from cinema. It's insane. Point being is yes, you can go to the Comcast and Roku route, but when you got FX, A&E, History, National, Geographic, Fox, ABC, ESPN, Disney, Pixar, Star Wars, Marvel, Disney in of itself says a bunch of things that it has.

I don't know how Netflix is going to compete with them. I don't think that they can and not only that, but they can bundle all of those things together, all of the ESPN, ABC history and the blah, blah, blah, together for a bit more expensive but at the same time, I think people will be willing to pay that. At the end of the day, they can bundle all that together and then still once the pandemic comes back, get money the way that they've always gotten money. [00:10:00] Their parks and their cruises. Yes, if they have, whether this storm end, they just got 95 million-plus subscribers, something that they were supposed to hit four years from now. If they do all that, all the other industries right now that they're in, are doing terribly. In meaning, I don't think Disney is going to do this at all, but in meaning, cruises are going to be a bit on a discount right now. Cruise ships, parks are going to be rough right now. If Disney wants to acquire more of that, they could get it a huge discount, Disney is going to be the live entertainment giant of the future, no doubt.

If you are stuck in a mindset that you think people aren't going to go on cruises again, I'm sorry, but they will want to get out back into the real world. I know the COVID sucks, but get back out there. If you think that people aren't going to go to movie theaters again, I'm sorry, but I think you're wrong. This is my own opinion, but if a dope new—okay yes, maybe not as often, but that just leaves people like Disney, who is very heavily involved in live entertainment and cinema to acquire these things to make them Disneyesque as they always do and everything that they do.

Disney knocks everything that they do out of the park, pun intended. Actually, it wasn't intended, but anyways, they really do. Whether it comes to their parks, whether it comes to their cruises, whether it comes to live entertainment, they have or Disney+, they have such a vast opportunity to be the majority leader in this. I think that Netflix [00:12:00] isn't going to follow a suit with that. That's it, guys. That's a quick one again. I really think that you should reevaluate, check in to Disney, check out their future. Yes, hopefully, you guys enjoyed this. Please get involved with your own finances and your own investing, and determine where you put your money more actively. It's fun, it's beneficial to you and it's responsible.

[music]

However, if it's over your head, just buy an ETF or an index fund, or give it to somebody else to manage it for you. Dear guys, have a great rest of your weekend. I will talk to you next week. As always, thanks for listening to Thoughts of a Random Citizen. If you guys are interested in getting in contact with me recording something to be played on the podcast or just want any tips or advice, head over toarcunited.com and that is the platform in which we operate. Enjoy the weekend.

[00:13:25] [END OF AUDIO]