Nolte: Wall Streeter Urges Disney to Drop Stagnant Disney+

Wells Fargo analyst Steven Cahall has called on Disney to abandon its current strategy for Disney+, arguing that the company's exclusive distribution model is harming its financial performance. Cahall claims that by retaining control over its vast library of content and distributing it solely through Disney+, the company is missing out on substantial revenue opportunities. He suggests that if Disney adopted a more traditional approach, similar to that of arms dealers in the entertainment industry, it could significantly boost its stock price. According to Cahall, Disney’s stock price has declined sharply, currently standing at $96 per share. This represents a 24 percent drop compared to the previous year and a 46 percent decline over the past five years. He attributes this downturn to the company’s decision to keep its content within Disney+ rather than licensing it out to other platforms such as Netflix, Apple TV, and others. Cahall argues that this strategy is not only limiting Disney’s potential earnings but also failing to capitalize on the broader market demand for its content. In his analysis, Cahall compares Disney’s current approach to that of an arms dealer, who produces content and then licenses it to multiple distributors. By contrast, Disney is hoarding its content and making it available only through its own platform. This exclusivity, he says, has led to stagnation in subscriber growth. As of the last quarter of 2025, Disney+ reported 132 million worldwide subscribers, with plans to reach 138 million by year-end. However, this figure marks a decline from the 154 million subscribers recorded at the end of 2024, which itself was lower than the 164 million registered the previous year. Cahall highlights the potential financial benefits of a different strategy. For example, he notes that if Toy Story 5 were distributed through multiple platforms rather than being confined to Disney+, it could generate additional revenue. Specifically, he estimates that by licensing the film to Netflix, TBS, and PlutoTV, Disney could earn up to $135 million beyond the $1 billion it might make from box office sales alone. He further suggests that if Disney followed a similar model to Sony, which earns around $1 billion annually from Netflix for its pay-1 movie output, the company could potentially secure nearly $4 billion in annual licensing revenue. When accounting for pay-2 models and Disney’s extensive library, Cahall predicts that licensing revenues could exceed $15 billion. He also asserts that investors would likely benefit from a shift toward a model that focuses on content production rather than distribution. Cahall mentions that Disney’s Chief Content Officer, Josh D’Amaro, may be exploring alternative strategies. He emphasizes that the company’s box office success, theme park experiences, and brand value should remain unaffected by such a change, suggesting that the transition could lead to a more stable and profitable business model. Currently, Disney is reportedly spending large sums of money on producing new content for its streaming service, which is not experiencing meaningful growth. At the same time, the company is not maximizing the value of its existing library by licensing it out to other platforms. Cahall argues that this approach is not only financially inefficient but also counterproductive to long-term shareholder value. His recommendations suggest that a strategic pivot away from exclusive distribution could help Disney regain investor confidence and improve its financial outlook.