Third Quarter Review — with Aswath Damodaran | Prof G Markets

Disney-Hulu

Disney's strategic acquisition of Hulu marks a significant shift in the streaming landscape. Scott Galloway explains that Disney initially viewed Hulu as a neutral platform, co-owned by several major companies, to compete against Netflix. However, the lack of control and credit for Hulu's success led Disney to consolidate ownership, aligning with its focus on streaming and theme parks 1.

Hulu was co-owned by Disney, Discovery, Time Warner, and Comcast. It ended up being a Frankenstein, where it was a bunch of companies, and the problem was that nobody was getting full credit for it.

--- Scott Galloway

This move positions Disney to better leverage its content and compete more effectively in the streaming market.

   

Streaming Insights

The financial performance of streaming giants like Netflix and Disney reveals intriguing dynamics. Aswath Damodaran highlights how companies like Meta have managed to increase earnings significantly by cutting costs, a strategy that might not be sustainable long-term 2. He suggests that Disney, with its vast content library, is well-positioned to thrive in the evolving streaming market, unlike others still struggling to find a viable business model 2.

Even Netflix, which has been the most successful of the streamers, I don't think it's a steady state model. It's a model where you throw immense amounts of content at the wall and hope something sticks.

--- Aswath Damodaran

Damodaran also notes that Google's lack of urgency in its AI business could hinder its growth, despite being reasonably priced compared to its peers 3.