Disney beats Warner Bros. Discovery with its clearly differentiated video streaming services, a Wall Street analyst said Thursday. Disney stock helped drive the Dow's advance on Thursday. Meanwhile, Netflix ran near the top of the S&P 500 and Nasdaq 100.
Needham analyst Laura Martin attended Warner Bros.' Max unveiling event Wednesday and concluded that its execution is lacking.
Warner Bros.' two streaming services — Discovery+ and the brand-new Max — are not properly differentiated, the analyst said. Max also includes Discovery+ content.
In contrast, Disney has three streaming services — Disney+, Hulu and ESPN+ — but each has a clear target audience, Martin said. Netflix is concentrated into a single streaming service.
Warner Bros. unveiled Max, its enhanced streaming service, Wednesday. Max will launch in the U.S. on May 23.
DIS Stock
Shares of Disney rallied nearly 3% to 100.84 on the stock market today, helping to power the Dow Jones' advance after another report showed cooling inflation. Shares close a fraction above the 50-day moving average and just below the 200-day.
DIS stock fell 2.5% Wednesday amid the Max unveiling event.
Disney stock lags well below a 118.28 buy point in a cup base that's part of a larger consolidation.
Netflix rallied 4.6% to 346.19 Thursday, fast approaching a 349.90 entry in a cup-with-handle base.
WBD stock initially rose but closed down 0.1% to 14.04. Shares tumbled 5.8% on Wednesday, falling below the 50-day line. Warner Bros. Discovery is consolidating with a 16.35 buy point, the MarketSmith chart shows. Warner Bros. Discovery debuted last year.
Disney+ Vs. Max
Martin also took issue with other parts of Warner Bros.' Max streaming video strategy — including the decision to delete "HBO" from the name.
"'Max' means nothing (i.e., requires more marketing spending) while 'HBO' spent hundreds of millions of dollars over decades to create a brand that meant best-in-class TV," Martin said.
Overall, the analyst deemed Disney and Amazon Prime Video the winners, beating both Warner Bros. and Netflix.
This is due to the better OTT (over-the-top) strategy, and deeper pockets, of the former two, Martin said.
