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This week, Disney has released it to Q three earnings,
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and since we just talked about six Flags earnings last episode,
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it's a good chance to compare the two. And since
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we talked, it looks like six Flags has announced an
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additional additional investment. So I wonder if if other people
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were thinking the same thing we were thinking, and that
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it wasn't exciting enough, you know, So we'll get to that.
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Looking at the Disney Q three earnings, it is spoiler alert.
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It's really good, and I think it's mainly good, like
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there's a lot in here, but I think the main
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takeaway to me is everything seems to finally be going
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in the direction that they had been trying to get
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it to go in for many years, which is essentially
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that their storytelling is back kind of at the forefront,
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you know, of where it had been slipping for a while.
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But storytelling is coming back up, and the streaming has
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finally turned around where instead of seeing huge losses from
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it recorder, they're now seeing profit from it and that's
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counterbalancing the money they're losing from their TV assets, right So,
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and you know, Parks has always been doing well, so
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if you kind of point streaming and parks and then
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some good stories. That's essentially where they're at. There are
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still some concerning moments, but overall, I think it's a
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really good a really good analysis, you know, a really
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good earnings call here, and I'm going to read an
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excerpt of the Deadline article on it which summarizes it.
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While there are some reasons for concern, like the ongoing
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meltdown of linear TV assets, the rise of sports rights costs,
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the challenge of picking a suitable successor to CEO Bob Bieger,
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the positives are manifold. The streaming operation, after years of
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heavy losses, is profitable, with a target of one billion
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in profit for physical twenty twenty five. Two billion dollar
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grossing movies Deadpool and Wolverine Inside Out Too have punctuated
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the film studio rebound, with the fundament with the foundational
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animation effort back on track, and moaned too looming as
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a likely holiday juggernaut. The Parkson experience. This division has
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also shown steady progress. So again, all these elements combining
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some key takeaways, I went through the earnings call and
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kind of broke them out into a few key takeaways.
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We got, like finances obviously the finances are doing well,
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but they're projecting high single digit adjusted EPs growth for
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the fiscal twenty twenty five. And the part I thought
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was interesting about the parks specifically, they said Q one
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will be negatively impacted by hurricanes and pre launched costs
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for the Disney Treasure, but bookings for the back half
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of the year are positive, like, well, at least they're
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talking about at least it's like in their projection where
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they're like, you know what, we already know Q one
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is gonna, you know, have issues, and then we have
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costs in Treasure, but bookings are positive. And I was like, well,
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it made me wonder our booking's positive potentially because of
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Epic as well, you know we Yeah.
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So it's interesting because I think that with all the
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Florida parks, you know, everybody says, oh, it's gonna be
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terrible because Epic's gonna suck everybody else out of all
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the other parks, and blah blah blah blah blah. No,
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what it does is anytime there's a new park opening,
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it it sucks people here from other places in the world.
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And and that's always good for all the parks. One
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of you know, going back in ancient history when Animal
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Kingdom opened. You know, when Animal Kingdom opened, Bush Gardens
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Tampa was terrified because it was kind of like, oh
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my gosh, here's another theme park that's animal themed and
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roller coasters and you know, thrills, thrills and thrills and
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chills and animal and nature. And it was one of
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the best years in the history of Bush Gardens up
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until that point, because again, it brought people who were
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interested in that kind of thing to the area, and
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when they're here, especially if they're traveling from other countries,
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they're like, well, you know, what do you mean there's
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something else that I'm going to enjoy the it's you know,
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an hour and a half, two hours away, heck yeah.
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So yeah. I think I think it is a little
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bit of the halo effect of Epic. I think it is.
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I think it's also that, you know, Disney, Disney has
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been kind of under the radar for a while, and
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I think that that people are like, you know what,
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we haven't done that in a while. Let's let's check
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that out. I really do believe that it's it's the
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pendulum swinging back.
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Yeah, by design, clearly, I mean, you know, yeah, you know,
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they definitely We've talked about this before, but you know,
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people in the industry all we all know that they
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all work together, and a lot of them because they
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go back and forth, and so you know that it's
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kind of by design.
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It's like, all right, well Epic.
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Is launching and they're doing their media blitz, so you know,
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it gives us a little bit of cloud cover and
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to fix streaming really and that's what they have done.
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And so speaking of streaming, some of the numbers here.
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They ended the quarter with one hundred and seventy four
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million subscribers, with thirty per seven percent of US subscribers
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opting for the ad supported tier, and that is that's
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huge because you know that was in the beginning, that
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was a big question, right, how much how how would
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the ad support we had if we remember we had
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never seen that, right. All we had was like traditional
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take TV, which was going out the window, and you
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know the then we had the unbundling and we had
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all these different services. But you know, the Netflix model
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forever was like d model, right, and yes, Netflix is
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doing the ad supported but we didn't know if that
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would translate. So clearly it has translated, which is good
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because it makes it more accessible, you know, to people
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that you know, don't want to pay the price tag
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of having to do Netflix and you know, Disney Plus
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at the same time. So uh, Iiger said, the ad
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AD supported tier is growing, driving engagement. And then the
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ESPN thing is interesting too because you know, as as
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the Deadline article mentioned, the rights for those contracts are
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getting more expensive, but they are trying to get around that.
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So the company will launch ESPN's direct to consumer flagship
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product in fall twenty twenty five. I could describe it
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as ESPN like it's never appeared before, incorporating features like
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sports betting, sports betting, and AI personalization, which again, I mean,
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who knows what that will look like. But you know,
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if the if the prices of this is rising, you know,
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and now that sports betting is legal in all these
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different cases, and and it's very I mean, that's I mean,
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that's that's a I mean.
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That could be a very big counterbalance to the right.
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Now, that could be incredibly lucrative, that could be incredibly lucrative.
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Going back to streaming, going back to streaming for just
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a moment, and the and the AD supported streaming. I
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think it's important to recognize, you know, this is something
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that has been going on. This this multi tier experience
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has been going on forever. I mean it was made
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most popular again trade paperbacks. It's all the same content,
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it's just presented in a different way to make it
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access will be on the velvet rope. So this this
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multi tiered level of this multi tiered approach to make
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it more accessible, to make it more so that you
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can actually see. It's not all or nothing, I guess,
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is my point. And I think that's I think that's
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something that is clearly tried and true, and I think
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it's something that's going to continue. I think it's something
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that we're going to see continue. I'm surprised that, you know,
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everybody was concerned about it, but I think what happens is,
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as you mentioned, you know, the first model that comes out,
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that's the one that everyone thinks, oh, well, this is
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the only one we can use, and truth be told.
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If you think outside again, think slightly outside the box.
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And I know I sound like the old guy, but
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look back to see what's happened and what's been done
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before in other industries. Because none of the problems that
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we're having are new. You know, there's always been Oh gosh,
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so and so is taking more of the market share.
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Pick an industry, you can pick any industry in the
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world or in history, and it's like, well, what are
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we what can we do to either to either shake
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up that model, break the model, or is there a
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product that we can use to replace it? And I
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think that we've seen a little bit of both of that.
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You know, streaming has replaced the cable bundling for the
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most part, and because again it had to break it
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apart so that they can now maybe perhaps start to
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put it back together or make it affordable so that
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people can put together their own their own packages so
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that they don't have to get stuck in what the
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h the cable companies, Like the cable companies wanted us
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to do. It's like here, here's this, this, this, and
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this and and you have to have it all or
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you can then add this and it costs more. Now
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it's just kind of make your own, make your own
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menu here. And and I think that by making your
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own menu and making it so that it's affordable to
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a broader spectrum. What is it? The yeah, the uh,
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the smart the smart pig gets fat, the greedy pig
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gets eaten. You know, I think that's I think that's
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what's happened here, is that it's finally they've finally started
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to realize, you know what, we can we can do this.
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We don't have to do this so that they have
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to pay for everything. We can do this so that
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we can have ad content as well as a subscription fee,
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as long as the subscription fee doesn't outweigh. I mean,
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let's face it, if you watch anything online, if you
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watch anything online, which is how we've you know, the
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vast majority of people who have been trained to consume content.
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Now you get ads, you know, you get you get interruptions.
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If you're you know, playing a game that you haven't
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bought out the ads, you will have time between the
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between rounds quote unquote where you have to sit through
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in it and people are just used to it, they
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recognize it, and they accept it. So yeah, I'm I'm
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glad to see I will be completely honest, I'm really
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glad to see that Disney is turning around, because I
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was concerned that it wasn't going to Disney is a
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part of a part of my mother's portfolio, my mother's
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ports stock portfolio, and it's been, as we've said, pretty
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much tanking. I mean, it's just been suck and wind.
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And I was the only reason I suggested putting it
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in there is because at the time there were some
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things that you know, as Philip mentioned earlier, Disney was on.
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They knew what they wanted to do, and they had
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a plan to get there. But it has just taken
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so much time for it to turn around. And what's
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really interesting is someone completely outside the industry. My mom's
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financial advisor said don't sell yet, there's a big uptick coming.
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She knew it, and I don't know how, but she
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knew that there was a big turnaround. And it appears
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as though we are I'm not going to get overly confident,
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but it appears as though we're seeing the beginnings of.
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That right now.
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Well, I think a lot of that turn around, I mean, honestly,
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I think I think my just personal take on this
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is that a lot of the turnaround has to go
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back to the storytelling. And I know that Iger always
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gives lip service to that, and I think we you know,
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he right when he came back, he did talk about
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switching moving around organization of departments so that they would
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have a better ability to tell better stories. And I
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think we you know, who's to say, really, I don't know.
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I mean, I don't know how you know, it's whatever
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on that, but I do think that there's no getting
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around it, right this. I'm not sure that this is
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all coincidence, right that, Like that the Deadpool and Wolverine,
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I mean that was an excellent, excellent movie, and inside
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Out two was excellent, you know, and.
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I don't know.
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It's one of those things where, yes, Disney has all
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these separate businesses, but at the end of the day,
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I feel like it still comes down to their storytelling,
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and you know, they need to be able to magnify
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and you the upcoming content like Mowana two, I mean,
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who knows, right, But everyone's excited for it, right, so
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it's like.
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Well, and let's talk about but let's talk about park
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content too. I mean, you know, the the announcement of
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Villain's Land is huge. I mean, that's been something that
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Disney fans have been wanting forever. And it's very interesting
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to talk to people who have worked in the parks
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for years because they will actually say you know, the
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parks have kind of been carrying the company for a while,
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and that was not the intent. That was not how
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they were designed, that was not the original business model.
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But because the parks were able to adapt for some
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reason easier than either the film side, the TV side,
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the streaming side, they were quite often asked to reduce
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their budget in order to make up for the loss
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in other areas. But I think it's interesting now that
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you know, as things are starting to turn around, it
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also happens to come at the time when this new