Thursday's Headlines: Disney ‘Primed’ For Its Own Membership Service
Here were the biggest movers in the MyWallSt shortlist yesterday:
Moving Up ⬆️
Baozun (BZUN) +5.3%
ShotSpotter (SSTI) +5.1%
Pinterest (PINS) +4.9%
Moving Down ⬇️
Stitch Fix (SFIX) -6.0%
CrowdStrike (CRWD) -5.5%
Lovesac (LOVE) -5.1%
RH (RH) -3.7%
Nordstrom (JWN) -3.7%
Here are the stories that you need to know ahead of market-open today, Thursday the 1st of September.
Disney ‘Primed’ For Its Own Membership Service 🪄
Disney (DIS) is reportedly exploring the concept of a membership system that would see members gain discounts or perks in exchange for spending more on Disney’s offerings such as its theme parks, merchandise, or streaming services.
The touted program has been compared to Amazon Prime, which gives customers free shipping and access to a host of additional services — such as Amazon’s own streaming service — for a monthly or annual subscription fee.
While Disney already has a program aimed at its more evangelistic fans — the D23 Official Fan Club, costing from $99.99 to $129.99 annually — this latest offering appears to target the more casual fan.
By doing this, Disney will be able to cross-sell its many attractions to a whole host of customers by harnessing the additional data it would receive. If a member spends most of their time on Marvel-themed rides when they visit a Disney theme park, Disney+ can then begin to recommend more Marvel programming to keep them engaged.
It’s very early days for this idea, so no price information is available. However, reports suggest that Disney has studied both Amazon’s Prime offering and Apple’s One bundle in an attempt to build out its own product.
Should Disney eventually launch this membership scheme, much of its success will depend on what perks are actually offered to its customers. Streaming services are often used to sweeten the pot, as seen by both Amazon and Walmart recently, so at the very least expect Disney+ to be bundled in for free. Could this be the next piece of Disney magic? Only time will tell.
Netflix Will Charge Top-Dollar for Advertising 💰
After much speculation, Netflix’s (NFLX) plans to launch advertising on its platform are starting to come into focus.
According to a new report from The Wall Street Journal, Netflix and Microsoft (MSFT) — who is supplying the ad-placement technology to the streamer — have already started meeting with potential buyers. What’s more, those buyers have said that Netflix is set to charge top dollar for ad-placement within its content — as much as $65 per 1,000 viewers.
This price, also known as cost per mille (CPM), is far beyond the price that other streaming platforms charge for ad placement. Hulu, for example, is said to have a CPM of anywhere from $20 to $60, depending on variables like the popularity of the show.
So, although Netflix has a much larger slice of the overall streaming pie than Hulu, it’s perhaps surprising to see them come in at the higher end of the pricing scale, especially considering that advertising is an as-of-yet untested feature on their platform.
That’s not to say that the company isn’t putting serious weight behind the endeavour. Two days ago, Netflix also announced that it had poached two of Snap Inc’s top executives to join the company as president of worldwide advertising and vice president of ad sales.
Veeva Beats But Slumps on Guidance 🤔
Shares of Veeva Systems (VEEV) are 10% lower in pre-market trading after the company forecast revenue below Wall Street expectations.
Veeva reported strong earnings last night, beating estimates on both the top and bottom lines. Earnings per share came in at $1.03 — two cents higher than analysts had expected. Revenue for the quarter was up 17% to $534 million, driven by a 17% surge in subscription services.
Net income fell 17% to $90 million due to a 41% increase in research and development costs.
However, it was guidance that caught the attention of investors. The company forecast sales of between $545 and $547 million — well short of the $558 million analysts had been expecting.
Veeva is the provider of cloud software for the life sciences industry. Their CRM (customer relationship management) solution, which is built on Salesforce’s (CRM) platform, helps companies capture and analyze clinical trial data, monitor pharmaceutical sales, uphold regulatory standards, and keep information secure.
The company was founded by Salesforce veteran Peter Gassner, who saw the opportunity to expand Salesforce's CRM software into other industries. He began by making Veeva's flagship product: Veeva CRM, which helps biotech and pharmaceutical companies engage with their customers. From there the business expanded into Veeva Vault, specializing in content management across the sector, from doctor's offices, to call centers, to R&D.
Despite being seen as mission-critical, Veeva has not been immune to the recent selloff in technology stocks. Shares are set to open more than 50% below all-time highs set in August last year.