Since its founding in 1923, disney (DIS 0.91%) has become a staple of entertainment for all ages, and its success is reflected in the performance of its stock. Since listing on the New York Stock Exchange (NYSE) in 1957, Disney has delivered consistent returns to investors for decades. This is largely due to the adoption of cutting-edge technology.
But lately, Disney stock has struggled. Over the past five years, House of Mouse stock has fallen more than 19%, losing about 44% of its value in 2022 alone.
Still, I believe Disney stock still has hope and plenty of room to grow. Indeed, the backdrop of economic uncertainty and recession fears has had a negative impact on much of the stock market, and Disney has clearly not been spared. We remain committed to delivering innovative entertainment in new and innovative ways.
In 2022, Disney has made great strides in its quest to create digital experiences for consumers. As people spend more time on their devices and new technologies become more accessible, Disney is keenly aware that it needs to develop its business model to remain competitive.
Based on recent developments, it looks like Disney has plans in place to tap into the possibilities offered by technologies such as the Metaverse, Web3, Blockchain and Augmented Reality.
Disney takes on a new role
Last year, Disney created multiple new positions to ensure it had enough resources to build out its entertainment arsenal. One of those positions is Senior Vice President, Next Generation Storytelling and Consumer Experience. Those who fill this position will be responsible for leveraging the potential of the Metaverse, Blockchain, and Augmented Reality. A vacancy for the position of Vice President was also posted.
And in September, seen as a move to ensure legal grounds are covered, Disney will assume primary responsibility for overseeing legal matters related to corporate transactions in the metaverse, non-fungible tokens, and blockchains. We have posted a call for principal counsel.
investment in the future
In my opinion, the strongest clue as to what Disney might look like in the future comes from this year’s entrants to the Accelerator program. The Accelerator Program is Disney’s venture capitalist arm that invests in up-and-coming companies to help them grow. This year’s class is filled with technology-focused businesses such as blockchain, augmented reality, artificial intelligence, and Web3. One of the most notable participants was polygon, a non-fungible token (NFT) and a blockchain that has gained traction in the last few years due to its utility in Web3. Disney’s ultimate goal is to create some sort of mutual relationship, but that’s not a guarantee.
Disney enters the 21st century
While these newly created jobs and accelerator program participants clearly indicate the direction Disney is headed, there is still some ambiguity as to exactly how all of this will turn out.
Based on these developments, I imagine the future of Disney taking shape in various ways. First, it completely redefines the amusement park experience. With the help of augmented reality and artificial intelligence, rides could include new digital-based features, allowing visitors to interact with characters from their favorite movies. Earn apparel or NFTs as you embark on a digital-based Easter egg hunt and use your device as a lens to find hidden prizes.
Then there is the experience at home. Disney fans not visiting the amusement park can collect rare his NFTs released on the anniversary of their favorite movie, or use blockchain technology such as smart contracts to gain exclusive access to movies and experiences. Earn your digital avatar in fresh Disney apparel.
The possibilities are truly endless, but it’s ideas and conversations like these that take place in Disney boardrooms.
buy today, buy tomorrow
It may be difficult to position Disney stock based on future developments that remain a bit vague. But there is one key aspect of Disney’s business that could provide the fuel it needs to turn a profit in 2023. It’s streaming.
Disney surprised investors when it reported losing about $4 billion on Disney+, sending the company’s stock price plummeting in an already volatile macroeconomic environment. . Disney plans to increase the monthly subscription fee from $8 to $11. With over 160 million subscribers, it has the potential to push margins close to breakeven. Even better, one of Disney+’s promotional offerings, which returned in 2019 and allowed customers to prepay for the new streaming service for as little as $4 or $5 per month, will end this year. This means that the price of these subscribers will almost triple, potentially adding even more profit margin cushion.
Former CEO Bob Chapek was quoted as saying that the Metaverse and related technology will provide the foundation for Disney to deliver “the next great storytelling frontier.” It looks like Disney is going full speed ahead but it may take some time and with a focus on streaming and reducing additional Disney costs this year streaming his platform will be profitable for the business You may be trying to change it to a higher part of the .
RJ Fulton is at Polygon. The Motley Fool invests in and recommends Polygon and Walt Disney. The Motley Fool recommends Walt Disney’s January 2024 $145 long call and Walt Disney’s January 2024 $155 short call. The Motley Fool’s U.S. headquarters has a disclosure policy.