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  "documentTitle": "The Walt Disney Company (DIS)",
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      "kind": "callout",
      "text": "Disney's DTC EBIT margins are 2,200bps lower than Netflix at the same scale. Netflix earned ~$5 billion more profit than Disney on effectively the same revenue base",
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      "text": "Disney’s DTC EBIT margins are 2,200bps lower than Netflix at the same scale",
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      "text": "Disney DTC vs Netflix cost structure as % of revenue.",
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      "text": "operating margin: 2,200bps",
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      "kind": "paragraph",
      "text": "We compare Disney's Direct-to-Consumer (DTC) business today to Netflix in 2019, when they had roughly the same revenue scale. In our view, Disney's inefficiency to Netflix is surprising given Disney's access to a larger library of premium, owned IP.",
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      "kind": "quote",
      "text": "Big picture, Disney's cost base is $4.8 billion larger than Netflix at similar revenue levels which given Disney's library, brand equity ability to window content and ownership of significant Media Networks to help promote their DTC platforms doesn't make sense at face value.",
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      "kind": "quote",
      "text": "“Big picture, Disney's cost base is $4.8 billion larger than Netflix at similar revenue levels which given Disney's library, brand equity ability to window content and ownership of significant Media Networks to help promote their DTC platforms doesn't make sense at face value.” — MoffettNathanson, January 2024",
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      "text": "Source: SEC filings, Wall Street Equity Research. Note: (1) Disney Direct-to-Consumer Operating Profit and Margin adjusted to include an estimated allocation of corporate and unallocated shared expense based on pro rata revenue contribution to Disney's consolidated CY 2023 revenue; estimated allocated shared expense included in Disney's 'SG&A & Other'; 'Operating Profit' figures are rounded and may not sum to the total of the unrounded figures.",
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      "text": "Revenue, Expenses, and Operating Profit comparison between Disney DTC 2023 and Netflix 2019.",
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      "text": "Disney's Streaming Business Is Inefficient vs. Netflix",
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