Is Disney Sitting on Top of a Multi-Billion Dollar Opportunity?

Disney (DIS) is one of those stocks that you can hold forever in your portfolio. However, due to the recent plunge in its media business, many investors don’t think of Disney as a safe stock anymore. But, due to the fact that Disney has a branched out revenue stream, I think investors should still stay invested in the stock.

A deal with Nokia

Disney is mainly known for its Adventure parks and Media networks, as a major portion of its revenue comes from these segments. Recently, Disney signed a long-term deal with Nokia (NOK) to use its Ozo cameras to create 360-degree scenes for movies, marketing materials as well as other purposes.
Disney, in its most recent movie- The Jungle Book, used $60,000 Ozo which is installed with eight 2K cameras to create VR extras content.

The company’s choice to create 360-degree content could help Alphabet’s Google as well as Facebook, as both of them have been commending content producers to share more 360-degree content. Both Facebook and Google are putting efforts to grasp a robust position in the VR market. Google launched the Odyssey, a 16 camera rig with GoPro for around $15,000 in 2015, whereas Facebook recently publicized an open source 360-degree camera design titled as “Surround 360”. Surround 360 permits customers to create their own high-end cameras for $30,000.

The market for high-end Virtual Reality cameras is still a young one, but the company’s alliance with Nokia might influence other foremost media firms to trail suit if it successfully creates fascinating Virtual Reality based videos. If that takes place, low-cost solutions like Facebook’s Surround 360 and Google’s Odyssey could turn into less appropriate products for massive studios while enduring too costly for ordinary customers.

Furthermore, Ozo also has a size advantage, as it is much smaller as compared to GoPro’s and Facebook’s bigger circular rigs, and could be more attractive to movie producers. At present, it is a great win for Nokia also, as it scored an early victory contrary to GoPro as well as many other VR camera manufacturers by making a deal with Disney. However, it is still possible to say that Ozo will become the topmost pick for skilled VR filmmaking.

However, Disney’s decision to consociate with Nokia for long-term clearly signifies that the company could be achieving a timely benefit in the tapered market for high-end Virtual Reality cameras. Given the fact that the Virtual Reality market is expected to grow exponentially in the next couple of years, I think Disney can gain an early movers advantage.

Even if it doesn’t, Disney’s efforts to further diversify its revenue stream indicate that the company will consistently try to grow and gain traction other surging sectors. Hence, I think Disney is still a safe stock that investors can hold for a long-period of time.
Published on May 10, 2016
By Prudent Investor

Copyrighted 2016. Content published with author's permission.

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