There can’t be many people on the planet who’ve not heard of Toy Story, The Avengers or Stranger Things. If there are, then they’re pretty strange things, themselves! Big movies and TV series are BIG business.
2019 has been a mammoth year for TV and film so far – and we’re only halfway through – so, we thought there’s no better time to analyse how the blockbusters, on both big and small screens, have an impact on the stock price of their respective companies. So… Lights, camera, action!
Toy Story 4 is Kids-Play for Disney Stocks
Toy Story is a series of movies so loved by everyone that it’s almost become an institution. Since it first graced the big screen some 26 years ago (has it really been that long?!), the franchise has gone on to dominate the box office, not to mention merchandising. As the latest (and final?) installment hits the screens after a nine-year hiatus, there are already plenty of analysts predicting that the fourth movie will send Disney (DIS) stock price soaring.
In fact, the film is already breaking records. Everyone’s favourite plastic sheriff, Woody, and his gang smashed the record for the biggest animated film opening weekend of all time. The numbers are stacking up pretty nicely for DIS investors, too.
The $238 million that the film brought in globally over its opening weekend suggests it could, ultimately, manage to tip over the $1 billion-mark, judging by the rise of past films. It’s just staggering! Shares in buckets are also presumably up, as Disney struggles to find enough of them to stuff their cash into!
Disney’s own CEO, Bob Iger, recently stated that in some years, ROI for the company’s film business tops 30%. The Bank of America has said that Toy Story 4 could garner as much as $85 million in consumer product revenues.
All in all, it’s suggested that the film could be worth as much as 23 cents in earnings per share for Disney – all from one film that cost a few hundred million to make and market. BIG returns!
Disney stock was actually slightly down 1% on Monday, to $138.77 per share, yet Disney stock is up about 26% year to date, owing to the earlier successes of Captain Marvel, The Avengers, and Aladdin. With half a year – and a not-so-insignificant Star Wars trilogy finale on the horizon – 2019 is already looking like it’s one of those 30% years, Bob!
The Small Screen is No Small-Fry
The success of streaming services like Netflix (NFLX) and Amazon Prime (AMZN) have also more than reaffirmed the power of television in the 21st Century – as if it needed it. Today, you can quite literally take thousands of your favourite shows with you, wherever you go. What a world we’re living in.
Netflix’s success has even allowed the company to penetrate The Big Four – the biggest tech companies in the world, Google, Amazon, Facebook, Apple (aka GAFA), now often referred to as FAANG – Facebook, Amazon, Apple, Netflix and Google. A mighty feat for the now giant TV streamer.
Things look positive for stockholders, too. A recent analysis of Google search trends conducted by Piper Jaffray, has determined that Netflix’s year-over-year international subscriber growth could hit more than 45%, smashing the company’s own estimate of 36.5%. And subscribers are still flooding in!
Interesting things are on the horizon in this space. Disney is working on its own streaming service that will claw back all of its titles (there are a lot) from other providers. Amazon Prime and HBO – fresh from its Game of Thrones successes – are also steady competitors.
We definitely recommend watching this space and keeping an eye on DIS and NFLX stock over the coming months. Both of which are tradeable CFDs with TIOmarkets, by the way, along with roughly 120+ other tradable instruments.
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