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What Is Disney’s Secret Project?


Aug. 14 2019, Updated 9:23 p.m. ET

Walt Disney (DIS) seems to have something up its sleeve, as it plans to announce a secret project on August 22. It plans to share more details about that project during its D23 Expo event, which runs from August 23 through August 25.

We already know that the company is launching its Disney+ video service in November to challenge Netflix. Let’s narrow this secret announcement down to two potential choices. In our view, the first option could be backing Dish’s wireless venture, and the second could be challenging Facebook and Twitter.

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Dish joining Comcast in the wireless business

Dish Network (DISH) recently secured a deal that could jumpstart its venture into the wireless phone market. In July, the satellite television provider agreed to pay $5 billion to purchase a collection of wireless assets from T-Mobile (TMUS) and Sprint (S). Also, Dish wants to have a 5G network up and running by 2022. By the end of 2023, Dish’s 5G network could encompass 70% of the US population.

Some of Disney’s major media peers have ventured into the wireless business as well. Comcast’s (CMCSA) Xfinity Mobile offers wireless phone plans on a rented network. Charter Communications’ (CHTR) Spectrum Mobile, through which it sells wireless phone plans, also operates on a rented network. Altice USA (ATUS) is also gearing up to launch its wireless phone service before the year ends.

In the spirit of catching up to its peers, it’s our view that Disney may want to consider joining Dish’s wireless venture. If Disney provides a phone service bundled with its upcoming Disney+ video service, it could add value to Disney+.

Is Disney’s secret new project in social media?

Disney has previously explored getting into the social media business. For example, Disney CEO Bob Iger said in 2017 that the company had considered acquiring Twitter (TWTR). Disney felt that Twitter’s global reach might provide a compelling way to market its content. Now that Disney will have more content to sell with the launch of Disney+, it may want to consider reviving its social media plans.

Perhaps acquiring Twitter might be too expensive for Disney to get into now, as Twitter commands a valuation of more than $32 billion. Disney recently closed a $71.3 billion deal in which it purchased a collection of entertainment operations from Fox Corporation (FOXA). In light of this deal, Disney might not have the immediate appetite for another big-budget acquisition.

Perhaps Disney’s secret new project could still be about building a social network platform from the ground up, which could complement the company’s expanding content business. Disney’s social media move could be a serious challenge for Facebook (FB). Facebook has been beset with privacy troubles, making it vulnerable to increased social media competition.

Disney venturing into the social media space to challenge Facebook could widen the divide between the two companies. Last year, Disney dropped Facebook and Twitter executives from its board of directors due to conflicts of interest regarding their respective video ambitions.


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