Gavin Baker @GavinSBaker Husband, Becky Painter. CIO, Atreides Management. Former PM, Fidelity OTC fund. No investment advice, views all my own. Apr. 12, 2019 1 min read

1) $DIS. Really impressed with Disney Plus – can’t think of anything they could have done better - and I believe they have a good chance at being part of the emerging oligopoly for global paid video content distribution along with $NFLX and $AMZN (additive, not zero sum).

2) Scale is everything online – even more so than offline. And as @ballmatthew points out, much easier to increase prices than increase users. $6.99 shows that $DIS understands the predatory game being played by $NFLX and $AMZN and is going to compete.

3) $NFLX is deliberately underpricing their service to suck all the competitive oxygen out of SVOD globally and I suspect will only raise prices in a serious way when they are over 500m subscribers and everyone but $AMZN and $DIS has given up

4) The fact that $DIS owns so much valuable IP and has other profitable businesses means they can compete with this strategy in a way that no other legacy media co. can. Elimination of the vault means every household with kids will have Disney Plus.

5) But execution always beats strategy. Large co’s that aren’t internet natives often initially struggle with the hypothesis driven, A/B testing informed constant product iteration essential to success on the internet.

6) Comparison of Disney Plus with $AAPL’s recent announcements left me a little embarrassed for $AAPL. Fascinating that they are so good at hardware and software and struggle so much with services (slowly improving – Giannandrea was key hire). DNA is powerful.

You can follow @GavinSBaker.


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