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Rohan Reddy, Director of Research at Global X ETFs, on Disney’s Stock Performance
Rohan Reddy, the director of research at Global X ETFs, recently discussed the performance of Disney’s stock with Quartz as part of their “Smart Investing” video series. In the interview, Reddy offers insights into the challenges facing the media and streaming industry, as well as his outlook on Disney and other streaming services.
The Tough Road for Media Stocks
Reddy highlights the difficulties faced by media stocks in acquiring subscribers in today’s competitive landscape. He mentions the struggles of Paramount and how it reflects consumer preferences and the challenges of the streaming industry. Despite Disney’s efforts to enter the streaming space with platforms like Disney+ and Hulu, it has been a challenging journey.
Path to Profitability for Disney
While discussing Disney’s recent earnings report, Reddy acknowledges the positive news that Hulu and Disney+ turned a profit for the first time. He believes that if Disney can scale its streaming business, acquire more subscribers, and reduce costs, it has a path to profitability. Reddy emphasizes the importance of patience, time, and resources in succeeding in the competitive streaming market.
Strategies for Success in Streaming
Reddy discusses the multiple streaming services offered by Disney, including ESPN+, which has faced challenges in turning a profit. He suggests that combining bundles to offer consumers different options and focusing on areas that are not performing well could be key strategies for Disney to improve its streaming services and achieve profitability.
Outlook on Disney and Netflix
When asked if he would recommend buying Disney stock at the moment, Reddy expresses caution due to the challenges in the legacy media sector. He believes that companies with a newer business model, like Netflix, are better positioned to succeed in the future. Reddy is optimistic about Netflix’s long-term outlook, praising their content strategy and global reach as factors that contribute to their potential success.
Conclusion
Reddy’s insights shed light on the complexities and opportunities in the streaming and media industry. While Disney faces challenges in the competitive landscape, companies like Netflix demonstrate a strong business model that sets them apart. As institutional investors navigate the evolving media sector, understanding the dynamics of streaming services and consumer preferences will be crucial for identifying investment opportunities.
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