Disney's Streaming Success, Tech Eyes More IPOs in '25 | Bloomberg Technology

Disney's Performance and Outlook

• Disney shares are expected to perform well until 2027, with the company on track for its biggest jump this year, beating analysts' expectations, and expected earnings growth over the next three years (1m11s).
• The company's creativity is back, with back-to-back billion-dollar movies and a strong slate for 2025, as well as 60 Emmy wins, feeding the flywheel of streaming, experiences, parks, consumer products, and cruise ships (2m9s).
• Given the investments made, Disney has good financial visibility into the returns on those investments and is confident it can deliver on its promises to investors (2m35s).
• The company is getting better at being profitable in streaming, which is attributed to the industry-wide macro-level factors supporting the business, as well as Disney's own efforts, including the combination of terrific IP, product improvements, and new leadership (3m11s).
• Streaming is a scale business, and as everyone gains more scale, it helps the industry overall, with Disney seeing a terrific future in streaming due to its IP, product improvements, and new leadership (3m3s).
• The incremental value of additional subscribers in a streaming business is very high, with low incremental costs, allowing for pricing power and good cost management (3m48s).
• The film studio has seen significant investments, with a focus on quality over quantity, resulting in back-to-back billion-dollar movies and 60 Emmy wins, and a strong slate for 2025 (5m25s).
• The focus on quality is expected to have a sustaining impact, with upcoming movies such as "Mow Anna," "Lion King," and "Captain America" expected to be big hits (5m59s).
• Live TV is seen as a hedge, particularly for the older demographic, while the ESPN flagship is not just another distribution channel, but a way to offer a unique experience that will change audience and customer attitudes towards buying sports (6m42s).
• Disney aims to provide a true digital experience through its ESPN platform, incorporating e-commerce, fantasy tracking, and online betting, making it a more interactive and digital product (7m1s).
• The goal of ESPN is to be available everywhere and provide value to its users, with the intention of being where the sports fan wants to be (7m32s).
• Disney views its business broadly, with every part of the company working together, including the studio, networks, and streaming services (8m9s).
• The company wants to keep everything under the same umbrella, including linear and streaming content, as well as sports rights (8m49s).
• ESPN subscribers have dropped to 66 million, down from 71 million last year, with a warning that they would taper off in 2025, leading to potential cost-cutting measures (9m6s).
• The launch of the flagship ESPN platform will be another trigger that will accelerate cost-cutting, despite the company's stellar guidance and earnings growth (9m39s).
• The lack of clarity and visibility has been a major concern for investors, but the company's roadmap to 2026 and 2027 has helped alleviate some of these concerns (10m10s).

Tech IPOs and Market Trends

• Despite it being 2024, cord-cutting is still a major topic of discussion, with many tech firms eyeing a 2025 IPO (10m19s).
• Some tech companies that have gone public this year are trading well above their original offer prices, with many waiting for 2025 to be the year IPOs "spring to life" (10m55s).
• There were seven true tech IPOs last year, which have traded very well, and there are at least seven tech companies in the pipeline for the first half of 2025 (11m27s).
• Private companies are able to raise more money at extraordinary valuations, but many still choose to go public for reasons such as branding impact and accessing more capital (12m26s).
• Companies often consider going public to provide liquidity for clients and shareholders, as well as to access currency for mergers and acquisitions, which can be an important part of their growth strategy (12m56s).
• Employee liquidity is also a factor, with companies having options such as buying back shares or using tender offers to keep stock without needing cash, which can be an alternative to going public (13m20s).
• The availability of private markets and various financing options creates a healthy dynamic for companies to make the best choices for themselves and optimize for factors such as valuation, branding, or shareholder value (14m3s).
• The US is expected to remain the primary destination for tech IPOs in 2025, although other countries and exchanges are also having successful listings, and a global investor base is emerging (14m52s).
• The trend of companies needing to have artificial intelligence (AI) as part of their listing story is shifting, with companies now talking about AI in relation to real revenue or consumer use cases, such as online travel or ad tech (15m54s).
• The use of AI is becoming more prevalent in various industries, with companies such as ASML seeing increased demand for their products, including a 5% increase in demand after announcing their AI engineering and software portfolio (18m24s).
• The growth of power-hungry data centers is driving demand for transformers and grid technology, with companies making investments in AI and high-performance computing to meet this demand (17m39s).

Disney's Streaming Surge and Market Movers

• Disney is projecting sales of up to $60 billion by 2030, despite a significant miss in the third quarter, which may have given the company a reprieve and a little element of confidence back (18m28s).
• Netflix is looking to the global success of the first season of Squid Games, which was the most popular show in their history, as the third and final season is slated for 2025 (19m12s).
• Australia is planning to enact laws that require big tech firms to protect customers, which will impact Meta, and the EU has fined Meta $141 million for potentially breaching services (19m51s).
• The fine is part of the EU's focus on the digital market, and regulators want more optionality for users, which may lead to more fines for big tech companies (21m11s).
• The accusation against Meta is that it is putting unfair trading practices on rivals, and the company plans to appeal the fine decision (21m37s).
• The EU's Digital Markets Act could fine companies up to 10% of their global revenue, potentially leading to a $10 billion fine for Meta if the issue continues (21m59s).
• Disney is reporting a streaming surge, with its stock up 7% on the back of its earnings, and the company's CFO is optimistic about the streaming landscape (23m40s).
• The CFO believes that Disney will be able to get subscribers and deal with pricing due to the value of its great product and good discipline with the business (24m33s).
• Other notable movers in the market include NVIDIA, up 1.7%, and Tesla, pulling back from its recent highs (23m51s).
• Disney's streaming business grew rapidly during the pandemic, but the company was initially spending too much money, which made no sense; however, they have now gotten it right with aggressive pricing and good content (25m37s).
• Despite initial concerns about password sharing, it did not seem to impact Netflix negatively, and it is unclear if Disney will follow the same arc, but they have grown quickly in the streaming game (26m15s).
• Disney's strategy of releasing content in theaters and then on their streaming platform is working, with movies like Deadpool and the upcoming Lion King 2, which will help keep existing subscribers and attract new ones (26m57s).
• The TV cable industry is showing weakness, but it feeds the beast of streaming, and companies need to change their revenue operating profit in a different direction and show stabilization or growth (27m20s).
• ESPN's limitation is being tethered to cable for another year, but once that is done, they can offer a standalone app with real ESPN content without a cable subscription, opening opportunities for ESPN (27m50s).
• Cable companies need to pivot and create value for cable subscribers, as young people today do not even know what cable is and are willing to sign up for multiple streamers and pay the money (28m19s).
• Netflix and Disney have the opportunity for one billion subscribers total globally, and Disney is trading at a discount on all levels in the marketplace today, with a valuation that is half of Netflix (28m44s).
• Disney's business is growing at double digits, and their experience business, which includes cruises and lodges, is a wonderful business that will continue to gain steam in 2025 and 2026 (29m48s).
• Disney is a cash cow, returning money to shareholders, and is a shareholder-friendly company (30m5s).
• Disney has a great runway for the next five years, but succession planning is a big question that needs to be cleared up (30m16s).

Databricks Tender Offer and Silicon Valley Politics

• A $55 billion deal for Databricks is a significant tender offer, with the company previously valued at $43 billion last year, and Thrive investing $1 billion (30m34s).
• The tender offer allows employees and early investors to sell their shares directly to the firm, giving them a chance to cash in without waiting for the IPO markets to be perfect (31m13s).
• This type of deal is happening more often, allowing insiders to get liquidity now and rewarding early employees and shareholders (31m32s).
• Databricks does not raise any money from the deal, but it gives the staff an opportunity to cash in (31m26s).
• The future of Silicon Valley politics may shift, with San Francisco's right potentially shifting (32m7s).
• SoftBank is expanding its portfolio, with 13F filings showing the company's growing investments (32m37s).

SoftBank and Webtoon's Global Growth

• SoftBank is expanding its portfolio, with 13F filings showing the company's growing investments (32m37s).
• Stories are being consumed not just in Asia, with 60% of the audience outside Japan and Korea, and people in North America may not realize they have seen films on Netflix and Amazon Prime powered by the same platform (33m14s).
• The platform has powered stories that turn into great films, collateral, and merchandise, and investors are still getting an understanding of the company's explosive global growth (33m30s).
• The company will focus on quarterly growth since it is only a quarter and a half out (33m48s).
• The future of IP is being explored, with potential transfers to movies and streaming, and the use of generative AI chatbots with names and likenesses (33m59s).
• The company is focused on AI, believing in human creativity, and using AI to enable storytellers to take hours out of the process and reach a global audience (34m12s).
• The company has 170 million monthly active users and thousands of stories coming to the platform every day, which AI can help find the ones people care about (34m45s).
• The core consumer in the U.S. is a sub-25-year-old female, and the company powers every genre, with two of Netflix's all-time top 10 projects coming from the platform (35m13s).
• The company meets its consumers with any genre they want, and current consumers are finding unexpected stories, not just in America but in international markets (36m0s).
• Webtoon's David mentions that his company does not focus on short-term changes and instead prioritizes long-term business, which helps them navigate economic policy and volatility across different jurisdictions (36m21s).
• Webtoon benefits from receiving revenue in the same currency as their costs, making them relatively immune to FX volatility (36m47s).

San Francisco Politics and Nationwide Shift

• San Francisco has become a conservative punching bag, with 15% of voters casting ballots for Donald Trump, the highest share for a Republican candidate in the city in 20 years (37m28s).
• Elon Musk has played a significant role in the shift, with prominent people and ties to the area, and David Sachs held a fundraiser that raised around $12 million (37m54s).
• The trend in San Francisco is part of a nationwide shift, with some tech people speaking out in favor of Republican candidates (38m19s).
• London Breed, the mayor of San Francisco, stayed within the Democratic party, but Daniel Lurie, the founder of a prominent nonprofit, won the mayoral election without any political experience (39m7s).
• The dissatisfaction with the status quo is reflected in the movements seen in San Francisco, including the homelessness and drug crises, and office vacancies (39m26s).

Ari Emanuel, UFC, and Bloomberg Technology

• Ari Emanuel, the CEO of Endeavor, discusses his approach to running multiple companies, emphasizing the importance of endurance and taking punches (40m51s).
• Emanuel has voiced his frustration with being a public company and is taking Endeavor private, selling off different parts of the business, including parts to TKO, where he will remain CEO (41m50s).
• Emily Chang participated in her first UFC fight, UFC 302, and described the experience as having "electric" energy, gaining respect for UFC fighters through intense training (42m43s).
• Chang had the opportunity to go backstage with Dana White and Ari Emanuel, discussing the potential and ceiling for the UFC, with 8 billion people worldwide who could become fans if given the opportunity to watch (43m3s).
• Dana White has a close relationship with President-elect Trump, who he claims will always be the UFC's number one fan, and previously gave the UFC a lifeline by hosting them at his Atlantic City casino when no one else would (43m29s).
• The UFC has a direct line to the White House, which could be beneficial for the organization (43m46s).
• Ari Emanuel is involved with the UFC and has connections with various people and themes around technology (43m51s).
• The discussion concluded with an invitation to check out more technology-related content and a recap of the edition of "Bloomberg Technology" (44m0s).