Please ensure Javascript is enabled for purposes of website accessibility

3 Things That Disney Got Right in August

By Rick Munarriz – Aug 31, 2019 at 9:15AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Shares of the media giant moved lower this month, but Disney still had some big wins at its theme parks and for its upcoming streaming platform.

Disney (DIS -3.20%) investors looking back on August aren't going to initially give the media giant a passing grade. The shares surrendered more than 3% of their value for the month. Between a poorly received quarterly reportfailing in negotiations to keep the current iteration of Spider-Man in the Marvel Cinematic Universe, a former accountant who turned whistleblower taking jabs at the revenue-recognition practices for scoring its theme-parks division, and now a massive windstorm barreling down on Florida as Disney World tries to salvage the historically potent Labor Day holiday weekend, there was no shortage of distractions.

The Disney bears may have won the month when it comes to the stock chart, but don't sell the House of Mouse short. Disney is still beating the market, even if it wasn't one of the market's top stocks this month.

Disney got a few things right in August. Let's break them down.

Halloween inspired fireworks at Disney with a pair of jack-o-lanterns in front of the train station.

Image source: Disney.

1. Star Wars vindication in Florida

Thursday's debut of Star Wars: Galaxy's Edge at Disney's Hollywood Studios in Florida checked off all the boxes of success that were missing from the world's leading theme-park operator's debut of an identical 14-acre expansion at Disneyland in California three months earlier. There were mobs of people there at the break of dawn, circling in lines extending through the park to get a glimpse at the Star Wars-themed update.

The queue for the land's lone attraction was as long as five hours at one point, a far cry from the scene at Disneyland in the springtime. Long lines are not fun from the consumer perspective -- and Disneyland had deliberately restricted access to those grabbing a limited number of reservations through the first weeks of California's debut -- but orchestrating an opening-day frenzy was just what Disney needed to silence the naysayers. 

2. A great deal for early Disney+ subscribers

Disney's D23 fan expo in Anaheim didn't generate the same kind of buzz that the media behemoth cooked up two years earlier, but it found a clever way to get people to sign up for its Disney+ streaming service nearly three months before its Nov. 12 launch. Disney offered expo attendees the ability to prepay for two years of service to get the third year free. 

Disney then made it available to all members of D23, a Disney fan club that has premium-priced tiers but also a general no-cost membership. This move triggered various blogs and news sites to promote the workaround to the discounted Disney+ subscription, as it was a free sign-up through the end of the Labor Day holiday weekend. This is brilliant on two different levels. Obviously, launching with a big number of subscribers is a great way to make an impact, but we also now have a lot of people signed up for D23's marketing missives. 

3. Halloween started in mid-August

Mickey's Not-So-Scary Halloween Party is a separately ticketed event at Disney World's Magic Kingdom, taking place on select nights after an early close. The party's success has inspired Disney to start offering the candy and costumed character fete sooner and sooner with every passing year -- and that pushed the party's 2019 launch to mid-August

Offering a $299 ticket for access to all but one of the three dozen nights is a risky gamble, but the move to push the start earlier in the summer is smart. Most people may cringe at a Halloween-themed event on a hot summer evening in August, but if folks keep showing up, it's hard to blame Disney. It's a bonus that this is historically when the peak summer travel season ends, giving Disney a way to crank out incremental revenue during a seasonal lull.

Rick Munarriz owns shares of Walt Disney. The Motley Fool owns shares of and recommends Walt Disney. The Motley Fool has the following options: short October 2019 $125 calls on Walt Disney and long January 2021 $60 calls on Walt Disney. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

The Walt Disney Company Stock Quote
The Walt Disney Company
$94.33 (-3.20%) $-3.12

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/02/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.