a bull case for Netflix is that they will spend a bunch of money on content to drive subscriber growth
a bear case for Disney is that they will spend a bunch of money on content to drive subscriber growth
a bear case for Disney is that they will spend a bunch of money on content to drive subscriber growth
Who knows how it plays out, but a powerful pattern to recognize has been "legacy" companies that have internally funded business model shifts that required short and medium term earnings dilution in pursuit of long terms value creation
Adobe earned $2.35 in FY 2011 and $2.08 in FY 15. The stock rose 305% vs 180% for S&P 500. Since FY 15 earnings have grown to $6.73/$7.69
Microsoft earned $2.73 in FY 12 and $2.79 in FY 16. The stock rose 270% vs 190% for S&P 500. Since FY 16, earnings have grown to $3.84/$4.05.
Microsoft earned $2.73 in FY 12 and $2.79 in FY 16. The stock rose 270% vs 190% for S&P 500. Since FY 16, earnings have grown to $3.84/$4.05.
When Jeff Ubben took a stake in Fox, he stated he hoped they could pull an Adobe. 
Pulling an ADBE can be lazy hedge fund-ese for "dear god, please give me multiple expansion". Sometimes it's appropriate, sometimes it's not. But, I think the idea that it is a given that dilutive Disney investment in content is a negative isn't correct.
