Entertainment great Disney (NYSE:DIS) has been having a lot of trouble lately. Now, there’s a new fight going on over carriage costs with Charter Communications (NASDAQ:CHTR) and the various cable networks that make up Disney properties. Disney has a solution in mind, however, and that was enough to push Disney up fractionally in Tuesday morning’s trading session.
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Disney took its appeal directly to Charter customers with two key words: “Hulu Live.” Thanks to the magic of streaming video, Disney has a pocket way around carriage cost battles, and that’s to get users to move over to the Hulu Live streaming services. With a move to Hulu Live, customers will continue to get uninterrupted access to the various Disney channels, including ABC and ESPN. Those channels have been blocked on Charter for nearly a week now.
The plan isn’t exactly a perfect one for subscribers. Nor is it exactly good news for Charter. It comes at a time when linear cable viewership is in freefall and streaming television viewing is on the rise. Voluntarily making a package less valuable by pulling channels but not cutting costs isn’t a great plan. Meanwhile, Disney is basically asking viewers to absorb a hefty new price increase. Charter’s 150-channel TV Select Signature package starts at $59 per month. Hulu+ Live—with Disney, ESPN, and ad support—starts at $69.99 per month. If that sounds tone-deaf to you, especially in a macroeconomic environment like this one, you’re not alone.
Analysts, however, are comparatively unfazed. With 14 Buy ratings, five Holds, and two Sells, Disney stock is considered a Moderate Buy. Further, with an average price target of $110.41, Disney stock offers investors 35.02% upside potential.
