Disney's Horror Movies and Netflix Hot Dogs

Big tech is still dominating the stock market, which was evident this week. NVIDIA rose 9.1%, Apple jumped 7.9%, and Microsoft was up 4.4%. Without those big movers in a market cap-weighted index, the week would have looked much worse than it did, which you can see in the Dow and Russell 2000 below.

The clear takeaway was that Apple’s AI announcement pushed the artificial intelligence narrative again — which I covered here — as the AI bubble inflated.

The Asymmetric Portfolio had a rough week but continues to outperform without much exposure to the hottest (and most highly-priced) stocks. We’re playing the long game, so I’m happy to miss out on some bubbly stocks for more attractive long-term opportunities.

In Case You Missed It

Here’s some of the content I put out this week. Enjoy!

Disney Horrow and Netflix Hot Dogs

Two unexpected media announcements this week came from Disney and Netflix.

Disney added the Saw franchise of movies to the Disney+ app through the Hulu tile and Netflix will air a live hot dog eating contest between Joey Chestnut and Takeru Kobayashi. Talk about the unexpected!

What in the world are the streamers doing?

They’re leaning into the smiling curve! Both companies want content that either appeals to a wide number of people or will draw passionate fans that are incremental to the core business.

Disney isn’t known for horror, so it’s bundling Hulu’s more adult entertainment with Disney+ and Saw is part of the strategy to draw subscribers looking for adult content. ESPN+ is the sports piece of that bundle while the long-term vision of including a streaming version of ESPN in the Disney+ app is expected to launch in 2025.

Netflix is making a concerted effort to attract sports fans with a new NFL deal and sports Netflix-style content like Drive to Survive featuring F1 drivers. Hot dog eating isn’t exactly a traditional “sport”, but it is competition. And the documentaries that will accompany this contest are right up Netflix’s alley.

Both Disney and Netflix are adding unique content that compliments their existing business. It makes perfect sense.

Contrast these moves to Paramount, who this week ended merger talks with Skydance Media and seems to be floundering with a business that’s barely breakeven and has a small streaming presence.

The reason the smiling curve makes so much sense in media is the flywheel it invokes on both the way up and the way down. For those in the top right, scale allows them to afford better content, which leads to higher prices, which leads to more subscribers, which drives more ad revenue, higher prices, and better content.

The flywheel works in the opposite direction for those without scale.

Max bent the knee a few weeks ago in a bundle deal with Disney+.

Peacock is offering a 1-year subscription for $20.

Paramount+…is so inept it hasn’t charged me for a year, so I have no clue what it costs.

Disney and Netflix are playing on another level. It may seem strange that Disney is adding horror to its lineup, but it makes sense when you look at the broader consumer base it wants to appeal to. Netflix is making a similar decision with the hot dog eating contest.

These are your two winners in streaming and horror and hot dogs show exactly why.

Disclaimer: Asymmetric Investing provides analysis and research but DOES NOT provide individual financial advice. Travis Hoium may have a position in some of the stocks mentioned. All content is for informational purposes only. Asymmetric Investing is not a registered investment, legal, or tax advisor or a broker/dealer. Trading any asset involves risk and could result in significant capital losses. Please, do your own research before acquiring stocks.