When AT&T (T -1.19%) grows up, you can bet that it probably wants to be Disney (DIS -0.06%). Disney+ has made the market forget about the media giant's recent shortcomings, sending the House of Mouse to fresh all-time highs on content news for a platform that isn't expected to turn a profit until fiscal 2024.

AT&T would love to be on the receiving end of the same kind of selective bullishness that Disney is scoring from investors. It hopes that its new streaming service -- HBO Max, which was officially launched six months after Disney+ -- could be its own version of Disney+, injecting enthusiasm into the otherwise moribund stock. The odds are not in AT&T's favor to follow exactly in Disney's footsteps, but let's break it down to see what the two large-cap stocks have in common before blowing it all to smithereens. 

Two women eating popcorn and watching something scary on TV.

Image source: Getty Images.

Carousel of progress

There are a lot of moving parts when it comes to Disney, but it's fair to say that the market's marching to the beat of Disney+ as the drummer. When the stock hit all-time highs in late November of last year, it was largely the initial success of Disney+ driving the high-water mark. Income was going the wrong way. Revenue growth was padded mostly by a big studio acquisition.

It took 13 months for the stock to take out last year's highs, and Disney as a whole is in much worse shape than it was before. Revenue has declined by 42% and 23% in the last two quarters, respectively. We're also talking about back-to-back quarters of red ink. Disney+ is the shining star here, even if it's currently just 7% of the revenue mix and a drag on the bottom line. 

Investors get it. They're overlooking the fact that Disneyland in California is still closed, box office revenue isn't happening, and its cruise lines happen to be toiling away in the last travel niche to recover at the other end of this pandemic. Can AT&T navigate these same tricky waters with the same kind of success? It won't be easy.

Roaming charges weren't billed in a day  

AT&T would love to rip the Disney+ page from Disney's playbook, but it's not that easy. For starters, Disney's problems aren't permanent. Its theme parks and cruise lines will bounce back once the pandemic is done. The outlook is hazier for its theatrical releases, but at least Disney is cashing in on its entertainment properties through Disney+. 

The knocks on AT&T have a more-tangy aftertaste. Its legacy landline business and DIRECTV satellite television businesses will keep fading. It's not a global vaccine away from recovery. There's a reason telecom stocks have been out of favor this year. AT&T's wireless business is relatively resilient, but it's so desperate to make HBO Max work that it's giving away the premium streaming service to some of its smartphone customers. It raided its next 13 months of theatrical releases to give the streaming platform day-and-date access to its multiplex slate.  

None of this will be enough to get HBO Max to the Disney+ level of stardom, but it doesn't have to go that far. HBO Max may have just 8.6 million activations, but that's just 23% of the combined HBO and HBO Max subscribers. If AT&T can get all of its old-time HBO accounts to make the migration to HBO Max (and as of Thursday, it's finally available on all major devices), it will be nearly halfway there. HBO Max costs roughly twice as much Disney+, so on a revenue basis, it will almost be there.

The rub is that even if all 38 million HBO subscribers were to hop on HBO Max, it would still fall short. Disney+ will be further along on the way to the 230 million to 260 million it's now targeting by the end of fiscal 2024. Disney+ will only pad its lead. HBO Max will eventually learn that it will need more than raiding the WarnerMedia release slate to keep up with the big boys.

Just as Disney+ wowed investors by announcing 10 Marvel and 10 Star Wars series earlier this month, HBO Max will have to squeeze its intellectual properties to make lemonade. HBO can't just fight the way it did to get to the top of the premium-cable realm. It needs more than just a single page from the Disney+ playbook if it wants to beat Mickey Mouse at his own game. It needs the whole playbook.