Apple (NASDAQ:AAPL) may be negotiating a deal with CBS (NYSE:CBS), Disney (NYSE:DIS) and News Corp (NASDAQ:NWS) to stream TV shows through iTunes for 99 cents an episode, according to a recent Bloomberg report.
This deal could help Apple challenge established streaming video players like Netflix (NASDAQ:NFLX) and Hulu. Even if the negotiations succeed, however, we don’t foresee any immediate impact on the $337 Trefis price estimate for Apple’s stock. Our analysis follows below.
Trefis members predict slightly lower revenues for Disney (NYSE:DIS) over the Trefis forecast period from sales of merchandise (toys, games, memorabilia, kids clothing) at Disney stores. However, slower consumer products revenue growth will have little impact on Disney, since Consumer Products constitute only around 7% of the $37 Trefis price estimate for Disney’s stock (12% above the current market price of $33).
The majority of Disney’s value instead comes from its media properties (ESPN, Disney Channel, ABC Broadcasting, etc.) where Disney competes with companies like Time Warner (NYSE:TWX), News Corp (NASDAQ:NWS), CBS (NYSE:CBS), and Viacom (NYSE:VIA).
Disney (NYSE:DIS) recently announced that it was spending about $763 million to acquire Playdom, a social gaming service that competes with Zynga and others. Disney competes with News Corp (NASDAQ:NWS), Time Warner (NYSE:TWX), Viacom and other diversified media conglomerates.
Big media companies covet the huge audiences that social networking startups have built over the past few years. Below we explain why Disney’s acquisition of Playdom makes strategic sense and discuss its possible impact on Disney’s stock. … To read the full article Subscribe to Trefis Pro
Time Warner’s (NYSE:TWX) stock could see a slight decline from lower than expected monthly subscription fees per HBO subscriber. Monthly subscription fees are an important source of revenue for media companies like Time Warner, Viacom (NYSE:VIA) and News Corp (NASDAQ:NWS).
We currently have a Trefis price estimate of around $30 for Time Warner’s stock, about 4% below the current market price of around $31 and estimate that HBO constitutes around 24% of Time Warner’s stock.
Trefis members have created forecasts for two key drivers of Time Warner’s stock over the last week: (1) Fee per HBO Subscriber and (2) HBO Penetration of US Pay TV Households. These forecasts suggest that Fee per HBO Subscriber will trend below the estimates of the in-house team of analysts at Trefis, while HBO Penetration of US Pay TV Households will trend in-line.
Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
News Corp (NASDAQ:NWS) posted banner results in filmed entertainment during its 2010 fiscal year, which ended last quarter. The growth was driven by successful releases like like Avatar and Alvin and The Chipmunks: The Squeakquel.
News Corp’s Fox Studios division includes 20th Century Fox, Fox Searchlight and Blue Sky Studios. It competes with divisions of Disney (NYSE:DIS), Time Warner (NYSE:TWX) and others. Based on the company’s generally strong results for fiscal 2010, we have raised the Trefis Price estimate for News Corp’s stock from $18 to $19.91.
We see an additional 5% upside for the stock if the filmed entertainment division manages to regain its historic 2006 market share levels over the course of our forecast period. Our analysis follows below. … To read the full article Subscribe to Trefis Pro
Trefis members have created forecasts for two key drivers of Viacom’s (NYSE:VIA) stock over the last week: (1) US DVD Pricing and (2) US DVD Market Share. These forecasts suggest that US DVD Pricing will trend in-line, while US DVD Market Share will trend slightly below the estimates of the in-house team of analysts at Trefis. These projections imply a small downside to Viacom’s stock.
Viacom sells DVDs under the Paramount Pictures brand. It competes with studios owned by media conglomerates like Time Warner (NYSE:TWX) and News Corp (NASDAQ:NWS). We currently have a Trefis price estimate of $36.65 for Viacom’s stock, slightly below with the current market price of $37.31.
Viacom’s stock is quite sensitive to (1) US DVD Pricing and (2) US DVD Market Share. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
Time Warner (NYSE:TWX) is benefiting from rising cable advertising prices, which are pushing up the media giant’s ad revenues. We expect this happy trend to continue and have raised the Trefis price estimate for Time Warner’s stock from $26.91 to $29.51.
Time Warner operates in three primary business areas: (1) cable TV with the HBO, CNN and TNT networks; (2) film with Warner Brothers studios; and (3) magazine publishing. The cable TV business constitutes just over half the company’s share value according to our analysis. Time Warner competes with other media conglomerates like News Corp (NASDAQ:NWS), Disney (NYSE:DIS), Viacom (NYSE:VIA) and CBS (NYSE:CBS).
If cable advertising prices rise higher than our current forecast, Time Warner would likely experience faster revenue growth and improved profit margins. In this scenario, the stock could see an upside of 3% to 4% or even more. Our analysis follows below. … To read the full article Subscribe to Trefis Pro
ESPN, owned by Disney (NYSE:DIS), is the global leader in sports video programming and arguably the world’s most popular sports channel. Disney competes with other media and broadcasting companies like Time Warner (NYSE:TWX) and News Corp (NASDAQ:NWS). We currently have a Trefis price estimate of $38 for Disney’s stock, about 11% above the current market price of $34.
Trefis members have created forecasts for two key drivers of Disney’s (NYSE:DIS) stock over the last week: (1) ESPN Fee per Subscriber and (2) ESPN EBITDA Margin. The member forecasts for ESPN Fee per Subscriber trend slightly above the Trefis forecast.
ESPN is the most valuable division for Disney, constituting around 32% of the $38 Trefis price estimate for Disney’s stock. ESPN telecasts popular shows like SportCenter and also has rights to major sporting events like the NFL, NBA, and the FIFA World Cup.
Disney’s stock is quite sensitive to (1) ESPN Fee per Subscriber and (2) ESPN EBITDA Margin. Below are charts showing recent estimates created by Trefis members for the two drivers in detail.
Hulu, owned by News Corp (NASDAQ:NWS), Disney (NYSE:DIS) and General Electric’s NBC Universal division, is an online video service that streams hit TV shows and movies. Hulu currently makes money through advertisements and commercials inserted in streaming videos. The company recently announced a new subscription-based service, Hulu Plus, priced at $9.99 a month.
Hulu’s entry into subscription-based video services provides more evidence that consumers are increasingly embracing online video. But it also means competition for Netflix (NASDAQ:NFLX), which uses a subscription model to sell DVD rentals and online video streaming services.
Hulu primarily distributes TV shows, whereas Netflix focusses more on movies. Also, Hulu is a newcomer to the subscription business model. As a result we don’t see Hulu Plus as an immediate competitive threat to Netflix. Our rationale follows below.
The New York Times (NYSE:NYT) recently reported a 12% year-over-year decline in its print advertising business for Q1 of 2010 compared to same period last year, primarily as a result of the on-going macroeconomic declines in the broader ad market. Furthermore, the company is facing rising competitive pressure from News Corp’s (NASDAQ:NWS) Wall Street Journal (WSJ) which is launching a NYC metro edition and aggressively luring new advertisers.
We estimate that the print advertising business constitutes a third of the $11 Trefis price estimate for NYT’s stock, making it the most valuable business for the New York Times (NYT). There could be a downside of 15% to the Trefis price estimate if NYT’s US print ad market share were to stagnate around 11% as a result of greater competition from the WSJ rather than increasing to 16% share as we forecast.