Three Things You Didn't Know About Disney

Walt Disney (NYSE: DIS  ) is the world's largest media conglomerate, with many of the world's most recognizable brands and characters. But as the single-largest media conglomerate, there are many smaller parts of Disney that fly under investor's radars. Lost among all of the Pixar movie magic and Marvel superhero box office dominance are three aspects of Disney that often go overlooked.

Leader in online streaming video
Many readers at least have a passing familiarity with Hulu, the online video service that does for streaming TV shows what Netflix did for streaming movies. But did you know that Hulu is jointly owned by Twenty-First Century Fox (NASDAQ: FOX  ) , Comcast (NASDAQ: CMCSA  ) , and Disney?

In 2009, Disney and its now joint-venture partners each took an equity stake in the fledgling video content site -- enhancing Hulu's video-content library greatly in the process. Hulu has grown up a lot since it began in early 2007 as a tiny video aggregator site.

So, in 2010, Hulu explored the possibility of an initial public offering. And in 2011, the company was in talks to be acquired. No such deal ever materialized, though. Instead of exploring additional options to divest the company, Disney decided in October 2012 to actually increase its interest in Hulu from 29% to its current 32% ownership position.

Another overlooked aspect involving Hulu is that the service has actually gone international. Launched in September 2011, Hulu Japan is a leading video-streaming site in Japan. Subscribers of Hulu Japan can get caught up on episodes of AMC's The Walking Dead, checkout multiple seasons of various CBS procedural dramas, or watch Marvel's Iron Man movie. And of course there is also a very large library of homegrown TV and movie content from Japan, as well as content from the UK, China, South Korea, Taiwan, and Hong Kong.

Artist depiction of Shanghai Disney Resort. Source: Disney

Future Chinese tourist destination
You of course know of Disney World in Florida and Disneyland in California, but did you know that Disney is currently building a resort in China's most populous city? Shanghai, the financial and cultural center of China and home to more than 23 million people, is also the future home to the Shanghai Disney Resort. Being constructed about 18 miles from the People's Square, Shanghai Disney Resort will be the fourth Disney resort complex outside of the United States and the first in Mainland China.

When completed, Shanghai Disney Resort will be nearly twice as large as Tokyo Disney Resort and more than three times larger than Hong Kong Disneyland. This resort-theme-park complex with its Disney-owned hotel, retail, dining, and entertainment establishments will also be in the enviable position of having approximately 330 million Chinese people living within a three-hour drive or train ride of the park.

Disney's parks and resorts is the company's second-largest business segment, and made up 30.5% of company revenue in 2012. Shanghai Disney Resort should provide a nice boost to future earnings when the park opens its doors by the end of 2015.

Importance of India
Continuing with the Asia-related trivia: did you know that India is very quickly becoming an extremely important country for Disney? With one-seventh of the entire world's population, it should not be too surprising that Disney -- or any multinational company for that matter -- would make India an area of focus. But what might be surprising is the extent to which Disney has decided to focus its attention on India.

Of the Disney Channel's 155 million non-U.S. cable subscribers in 167 countries and territories, 10.1 million alone are located in India as of September 2012. Today, India is the fourth-largest international market for the Disney Channel and is continuing to grow quickly. Impressive, but in India it is local content that is the key to the Indian consumer.

So in 2006, Disney acquired Hungama, a leading children's channel in India. That same year, Disney also took an equity stake in UTV Software Communications, one of the largest media companies in India. Both purchases worked out so well that Disney decided to purchase the entirety of UTV in 2012, which included live-action Indian movies and TV production, animation production, satellite TV broadcast, video game development, and various online media properties (to name only a few of UTV's business operations).

Today the Indian media market is still in relative infancy, but Disney's future in India is looking bright, with locally produced Indian movies as well as TV content such as the Disney Channel Hindi-language sitcom Best of Luck Nikki (an Indian adaptation of the U.S. Disney Channel's Good Luck Charlie).

Foolish bottom line
Often with big conglomerates like Disney, the smaller parts of the company can go overlooked by investors. But it is the smaller parts today that could be the large revenue drivers of the future. A leading streaming service in the U.S. and Japan, a tourist destination being constructed in Mainland China, and a growing media empire in India; these three certainly fit the bill as parts of Disney to be keeping an eye on in the future.

Can Disney take over your living room?
Television, as we know it, is on the verge of a transformation. The companies that prevail in this epic disruption could go on to earn their shareholders untold sums of money. And the companies that lose could very well end up in bankruptcy court within a matter of years. With this in mind, our top technology analysts created a groundbreaking free report that sorts out the likely winners from the losers. In doing so, they reveal the handful of companies that are best positioned to make their shareholders exceptionally rich over the next few decades. To download this invaluable free report before the rest of the market catches on, simply click here now.

 


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2758619, ~/Articles/ArticleHandler.aspx, 11/27/2014 3:06:52 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement