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Why Is 21st Century Fox Focusing on Its Core Brands?

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Importance of core brands

The media industry is changing, with an increasing number of viewers watching content online and MVPD (multichannel video programming distributors) launching online streaming services. In this environment, 21st Century Fox (FOXA) believes that brands will be key.

At the Bernstein Strategic Decisions Conference earlier this month, the company stated that it believes that its core brands will differentiate it from competitors. The company believes that MVPDs and consumers will pay for popular core brands and these brands will drive the demand for content.

As a result, the company is focusing on simplifying its portfolio of brands. The company stated that it considers its National Geographic brand as a valuable part of its family-friendly programming. The brand also includes Nat Geo Wild and Nat Geo Kids, which makes it valuable for streaming.

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Disney is also focusing on its core brands

The Walt Disney Company (DIS) is another company that is focusing on its core brands and strengthening its intellectual property portfolio. In its 2Q16 earnings call, Disney stated the dynamic SVoD (subscription video on demand) market will continue to offer new opportunities to sell content and the company will continue to invest in the creation of its IP (intellectual property).

Disney has entered into an exclusive syndication arrangement with Netflix (NFLX) for the Pay 1 and Pay 2 windows for films released through the 2018 calendar year. This means that Netflix can stream new Disney movies released from 2016 onward.

Disney makes up 0.8% of the SPDR S&P 500 ETF (SPY). SPY also has a 3.5% exposure to the computer sector and a 0.12% exposure to CBS (CBS).

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