With smartphones now seemingly ubiquitous and tablets increasingly common, Disney's vast trove of content puts it in a great position. "We really see [Disney as] the largest benefactor [of the mobile trend] in the content companies," said SureVest's Luna, also pointing to IAC/Interactive. "I don't think it's any coincidence that these stocks have really been rallying over the last year and a half, two years - these were stocks that were dead money for quite a while."
Disney, a Dow component led by Wall Street darling Bob Iger, recently delivered the largest quarterly earnings in the company's history and the entertainment giant's shares have climbed an impressive 41% this year.The Burbank, Calif.-based company is no stranger to the mobile market. In June, for example, Disney launched three streaming apps for the iPhone and iPad, the result of a major distribution deal with Comcast (CMCSA). The launch gives Comcast's Xfinity TV customers who subscribe to the Disney Channel, Disney XD and Disney Junior networks access to the WATCH Disney Channel, WATCH Disney XD and WATCH Disney Junior live streaming apps. The move came followed a similar arrangement to live stream ESPN programs to Xfinity TV customers via iOS devices. In 2011, Disney's ESPN subsidiary also launched a live streaming ESPN app for smartphones and tablets with Time Warner Cable (TWC), Bright House Networks and Verizon (VZ) FiOS TV subscribers. Speaking during Disney's third-quarter conference call recently, CEO Bob Iger said that he's pleased with the response to these efforts. "We're very encouraged by the apps that we launched through Comcast and the app, the ESPN app that was launched by Time Warner about a year earlier," he replied, in response to an analyst's question. "The take up rate in terms of downloading the app and ultimately authenticating has been impressive and what's really impressive, particularly from the Disney Channel side is the number of shows that have been viewed on that app." The CEO noted that people, particularly children, are willing to watch long-form video on mobile devices. Iger also described a "veritable queue" of distributors lining up to carry Disney's streaming apps. Clearly, Disney's seeing great momentum in this space. Last week the company announced a major distribution deal with Cablevision (CVC) to deliver a host of sports, news and entertainment via traditional television, tablets, phones and handheld devices. The deal encompasses around 70 services in Disney's portfolio, including ABC, Disney Channel, Disney Junior, ESPN and ESPN 3. Live streaming, though, is just one part of the Disney empire, and the company has been quick to seize the opportunities offered by gadgets, whether for interactive books, games and even travel apps. A quick search for the term 'Disney' in Apple's App Store, for example, reveals 185 iPad apps and 255 iPhone apps. Then there's comic giant Marvel, which was acquired by Disney in 2009. The following year, the company unveiled its critically-acclaimed Marvel comic app which became the top free iPad comic app within a day of its launch. Underlining the seismic shift towards handheld gadgets, Marvel recently added digital codes to a number of super hero comics sold in stores, such as Avengers and Captain America. The codes, which clearly aim to lure readers into the lucrative online media market, provide free digital versions of each comic via iOS and Google Android devices. "If you look at the tablet market for young children, Disney is pretty much attached to everything we look at," noted SureVest's Luna. "They have so many ways to leverage each new consumer - from a tablet going into a household, it opens the door to other merchandise, theme parks, and also television." Apple's iPad, of course, has already enjoyed phenomenal success in the education market, increasing childrens' familiarity with the technology. With rumors intensifying that the company is about to launch a smaller-screen iPad Mini, better suited to smaller hands, Disney must be eyeing yet more revenue. TheStreet Ratings rates give Disney an A+ 'buy' rating thanks to its stock performance, as well as the company's strong earnings and revenue growth.
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