Disney's New Distribution Agreement - Analyst Blog
January 02 2013 - 9:20AM
Zacks
The Walt Disney
Company (DIS) announced a new long-term content
distribution agreement with Charter Communications
Inc. (CHTR), whereby the latter will deliver Disney’s
popular programs to Charter TV customers.
Subscribers of Charter TV can watch
live or on-demand content 70 Disney, ABC, and ESPN services on
their TV sets, PCs, smartphones, gaming consoles and tablets.
Although, the financial terms of the deal are not disclosed, the
renewal agreement is expected to benefit both companies over the
long term and broaden their reach going forward.
We believe that the deal will
fortify Disney’s multichannel subscription model by adding more
platforms to deliver its content any time and on any device. The
company’s focus on providing out-of-home access to its popular
programs will help it gain new subscribers. Moreover, such moves
not only strengthen Disney’s position but also create long-term
revenue generating opportunities.
Disney has a number of content
distribution deals with companies like Comcast
Corp (CMCSA), Netflix Inc.
(NFLX) and Cox Communications.
Earlier, the company announced the
content distribution agreement with Cox Communications and entered
into a multi-year licensing agreement with Netflix, enabling it to
stream movies from the Disney Studio and its associated studios
instantly after release. Further, Netflix would gain access to
Disney’s direct-to-video releases starting 2013.
Disney also has a 10-year long-term
comprehensive programming distribution deal with Comcast, thus
enabling Comcast’s authenticated pay-TV subscriber to access
Disney’s wide variety of contents.
Walt Disney is one of the world's
leading diversified entertainment companies. Moreover, the company
commands a formidable portfolio of globally recognized brands,
primarily its namesake brand, Walt Disney, followed by ABC, ESPN
and Marvel Entertainment. These renowned brands offer a strong
competitive edge to the company and bolster its well-established
position in the market against major players like News
Corporation (NWSA) and Time Warner Inc.
(TWX).
Currently, we maintain a long-term
‘Neutral’ recommendation on the stock. Moreover, Disney’s shares
hold a Zacks #3 Rank, which translates into a short-term ‘Hold’
rating.
CHARTER COMM-A (CHTR): Free Stock Analysis Report
COMCAST CORP A (CMCSA): Free Stock Analysis Report
DISNEY WALT (DIS): Free Stock Analysis Report
NETFLIX INC (NFLX): Free Stock Analysis Report
NEWS CORP INC-A (NWSA): Free Stock Analysis Report
TIME WARNER INC (TWX): Free Stock Analysis Report
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