Drivers. The company is seeing a 60 drop in parks and Consumer Products revenue. A 62 dip in studio revenue. The numbers are backward looking. Challenges remain in the here and now. You have surging covid cases. Today, we saw the chicago shut down. Cruise returning early. Joe the scene that is a lot of things going on. Lots of good term lots of things going on. The shortterm, losing money on lots of struggling aspects. You see some of the details. Media networks gaining 11 . Studio entertainment plunging. No one is making or going out to the movies. Parks experiences only down 61 should the director of consumer and International Gaming romaine absolutely a microcosm of the economy. Will be interesting to see as they pushed deeper into the streaming space, how they leverage that to go back to the toys, the parts and those things they used to use. Joe joining us with more insight is a Bloomberg Intelligence media analyst. How disneyking about is the microcosm for the whole economy. All of these good things longterm. Building up millions of hope to viewers who are at home watching disney plus. As long as those trends continue, will investors close their eyes and sort of ignore all the pain in parks and studios . I absolutely think they will. As you mentioned, covid19 has butiled multiple segments, it has also been quite a big positive in the sense it has been this accelerant for the streaming business and really a blowout quarter. They crushed expectations. Came in with over 16 million adds. That is higher than the number netflix reported a few months ago when they had that big q1 number. What this company has achieved over one year, it is exactly a year since they longed disney plus. They launched disney plus. Is, are theytion willing to go all in . That is what investors have been looking for. It looks like they absolutely are. Caroline what is all in look like . Does all in look like more mulan releases . Theythink so because actually Just Announced a reorganization of all their segments a few weeks ago. What that date is it kind of took all their different content engines you look at the film and tv studios and their streaming assets and they are kind of combining that. But it is supposed to do most likely is accelerate this transition from a traditional linear distribution model into streaming. More details are going to come out on a december 10 investor day. That is going to be the next big catalyst. That is all in. Maybe that means they take their movies directly to streaming, i passing the theatrical release. They take more of their Sports Properties onto the espn streaming channel. It has huge ramifications not just for disney but the whole media ecosystem. Romaine the subscriber numbers, the 73 or so million subscribers that are now on disney plus, i believe that exceeds the u. S. Total for netflix. I am curious about growth. When we talk about netflix and their subscriber numbers, it is always like, how many more can they add given how many households are signed up . That seems to be the question i have for disney plus. How much growth is left in this. Actually a lot of growth. In a few only launched markets. The u. S. , they had a big push. Canada, australia. A lot of englishspeaking markets in europe. They still have two major markets. They have some part of asia covered, but there is still a much more extensive launch they are planning. Expandsd of really their total addressable market. Romaine i want to point out, cost crossing the wire right now, disney saying they are launching tuesday in brazil, mexico, chile and argentina. Joe is this a problem for net look for netflix . Are we in this stage where everyone can win and everyone can keep growing and posting numbers that shock to the upside . I think netflix was a little late last time. Or are we starting to see evidence people are picking some streaming services and cutting back others and it is becoming more zerosum . I do not think it is a zerosum game at all. There is going to be a shakeout. We view this now getting to be a two horse race between netflix and disney. We do think netflix will be the core of this new streaming bundle. It is going to be the anchor just because of the tremendous Value Proposition it offers. At the same time, you have disney with their fantastic ip. They have brands that appeal across the globe. We think there is space for both of them to thrive and do extremely well in this streaming ruptured caroline remind us, december 10 when we get that data, what to expect in terms of the hulu, the espn brand and then the disney brand in terms of the streaming brand . Do you expect this to be bundled together . They have activist investors calling for putting the money into the expansion. What you expect . Expect . You they are already offering different bundles. That has sparta growth in espn plus. The one thing we did mention is hulu is not a brand that is going to travel well internationally, which is why they are rebranding their international as a star brand, which is a take on the hot star. 300 million monthly active users in india. That is where the focus is going to be. I absolutely think they are going to do something pretty transformative in terms of all of their content engines chaired taking that and their content engines. Taking the and the streaming first approach. Romaine there is a mentor and serial that has sold out a mandalorian cereal that has sold up. We appreciate you bringing some clarity, insight and a lot more smartness to the program than i can provide. We are going to continue to focus a lot more on these topics. Disney has the cruise business, the parks business and the resort business. We are going to talk about that sector and whether it can bounce back. Robin farley is going to be joining us next. This is bloomberg. Are focuseday, we on the stayathome trade. Disney earnings coming here after the bell and showing the push into disney plus paying off for them at the moment. 73 million subscribers. That is more people than voted for the president. Joe i think it is right around that. Have you checked the latest numbers . Romaine nothing like injecting a little politics. Joe clearly we are in this moment. There is sort of some optimism. In the meantime, the stayathome or the sort of state homes are back. Nasdaq outperforming today. We heard from southwest earlier today saying they are seeing weakness again. In the short term, it is not great for any business that relies on people going out. Caroline would either of you guys get on a cruise right now . Romaine no. Caroline not even to the caribbean . Im amazed people are doing it. The first cruise to sell to the to sail to the caribbean since the pandemic has had to return early. Joe that was our old colleague. Avid cruiser. Caroline this is not a joke. People actually have been on a cruise and have got covid and apparently they are having to quarantine on board as the ship awaits authorization that is embarq. You cannot make it up. Joe for more, lets bring in the ubs consumer cyclical analyst. It is not a joking situation but we joke about people jumping to get back on cruises. Of course theres a covid case. Does this speak to the troubles the industry has or does this tell you this industry is going to be fine . That people even in this environment want to get on a cruise. Once covid is finally over, they will be tremendous demand longterm. Is they arer issue not allowed to operate right now by the cdc. There is another cruise line are had that case and those not necessarily the protocol is the major cruise lines will be following when they are allowed to start sailing from the u. S. There was reportedly a case. I do not know how much information has been confirmed, but the idea that there will not be this virus on ships is everywhere in society. It is in every state. There will be some cases. The question is, can you keep it from spreading . If somebody has it, can you get them the care they need . I do not think there is an expectation that there is a world in which does not exist at the moment anywhere. But there is demand for cruises it i do think that is clear. Caroline extraordinary that you get on a cruise and immediately all guests and not a central crew are quarantining. I guess you have to brace yourself for that. It is a very sad state. I do not think those are the protocol the major cruise lines will be following. We can see in europe some examples where cruising was allowed to restart in italy and germany including some brands owned by carnival and royal. If a casework to be found, that person would be isolated. It did not affect in most cases others on the ship. The goal isnk not to have everybody on the ship quarantine if there is a case. We do in same Thing Society now. If someone has it, they quarantine. All of the other activities go on and that will be the same with vacationing should romaine there is obviously a risk proposition getting on a cruise and being stuck at see forever how many days. There are other elements of the travel and leisure space. Whether youre talking about theme parks, casinos, other places where maybe i would think people would feel more comfortable going and people could go and come freely. Do you think that part of the travel and leisure segment could rebound faster . Like are seeing things regional gaming where revenues have come back. If you are talking about cruise lines, a comparable thing would be hotel stays for multiple days. Some of those other things are not substitutes for going on vacation. Not know of another business that tests everyone before they go into a restaurant or before they go into a hotel. So when the cruise lines that are under jurisdiction of the cdc, selling out of the u. S. , that will be testing everybody before they enter. Thatmay make people feel is a safer environment, which i do not think there is any place, school or work, where that is happening elsewhere. There is a difference between the hotels where there is a lot of Business Travel and that is a function of other things going on in the economy before Business Travel comes back. We saw leisure demand through the summer. That is what helped hotels through the summer. The cruise lines are pure leisure travel. When they are allowed to restart, the only thing they need is for the leisure demand to come back. At this point, vacations are not going to be replaced. People are going to take vacations. Business travel will take a bit longer to come back. At some point presumably, there is going to be a vaccine. It will be widely distributed and one day, covid will be a thing of the past. Are there any areas of the company you cover for whom in the meantime there is concern about whether they have the Balance Sheet buffer to get to that end point . The major Macau Companies and the cruise lines, they have all raised a lot of liquidity. The cruise lines can get to early 2022 with zero revenue. That is not our expectation that is what it is going to be but they do have liquidity. Quiddity. Ve that the that is going to make it tougher. If we say demand would go back to where it was tomorrow and profitability would go back, they are going to have to live with the debt they barred they borrowed. That is not mean there is not upside in the stocks from these levels but if demand went back to january magically, the stock value will not. That is an issue for the cruise lines because they have had to do a lot of the Capital Raising shared for Hotel Companies like hilton and marriott, they have liquidity. They will be here. Those are capital businesses. Hilton and marriott rent their brands out to hotel owners. They will collect their revenue and they do not have the asset intensive nature the cruise lines do. That asset light model in a downturn like this is certainly a healthier model. Caroline you have been right in the voyaget this is we have been disgusting we have been discussing. Managed anyone who has to pivot rather well in this . We started this conversation out by talking about disney who has managed to double down on streaming and focus on that as other parts of the business do not do so well. I think marriott we have looked at core hotels as well. Some of these companies were set for a new era. How have these companies pivoted and look for opportunities amid what is a dark cloud of covid . Hilton, theytt and are fantastic companies. Rooms are from Business Travel. Hotels, twooice thirds of leisure travel. They have brands Like Econo Lodge and comfort inn. People getting on the road and doing domestic leisure travel. They are poised to benefit from that. Companiesead, i think like held and marriott, we are going to see them making changes so that even when Business Travel does return, the check in experience is going to be done at a kiosk. It is going to reduce the interaction and that is going to save some money. Same thing with during your stay, they will change over a room but you might not get daily housekeeping during your stay. It is going to be presented to keep others out of your room it also there is a costsaving element as well. We will see some changes with that to keep expenses down and to minimize interaction. Some of those things will stay with it even after the pandemic. Oe our thanks to robin farley coming up, the virus and vaccine whiplash. Is there a rotation trade still on . We will discuss that next. This is bloomberg. Caroline we are focused on stayathome trade. Shownave kind of been by the numbers. Not going on cruises at the moment. Disney plus subscribers, 74 million. The challenge now is for investors to determine where we go and as covid cases surge, do we stay back on that trade or do we look to the future . Joe we had a good 15 minutes where the return to normal trade worked really well earlier. It was this week in the wake of the pfizer news. That white line, this is the yeartodate chart. Netflix doing phenomenally. The blue line is six flags. That is not doing well. Disney right there in the middle. Kind of a half netflix, half six flags. Despite the rotations and everything, the theme for the year is pretty clear. Romaine we saw a little bit earlier, a lot of the Cloud Companies and those companies that work hind the scenes to keep the internet functioning, they are continuing to push higher. Katie cry bring in failed. Greifeld. Was supposed to happen one out of every 17 years. Itit going to continue or is going to keep being one out of 17 million years . That is the question. Maybe we were full again and this is a head fake. The new input is we did have that very encouraging virus news, but that has been forgotten as we have some really ugly headlines from around the country. Chicago being urged to stay home. You are seeing harsher lockdowns be reimposed in new york city. It is important to remember what shut the door on the rotation trade that was butting at the start of this week. We are holding on to some pretty great size and scope. If you look at the russell 1000 value index, it is still up for a Third Straight month of gains versus growth, which seems pretty sneaky at this point. Obviously you look at what is in the valuation index, it is heavily weighted to financials and energies. Financials took a beating with the bond rally. Even though the Energy Sector is up 12 this week even with todays losses, it is unclear how long that can last if people start driving less and stop traveling. Those are the sectors that need to do well. Romaine i do not have any fancy mathematics, but this has to tiein with what we are seeing with regards to treasury yields. You just saw the reflation trade completely leave the bond market today. I think 10 year yields are back to 87 basis points. We were talking about 1 on monday. In todays world, that is a big move. Obviously with those hopes fading we are going to get the nice reopening trade and the inflation, that has been sidelined. You are seeing that reflected in the equity market. When you look at those financials, those sectors that make up the trade. Us thee always bringing stinky trades that are going on. Romaine that should be a campaign slogan. Caroline i am assuming i am off tomorrow romaine you are off tomorrow . Are you going to six flags . Caroline im going to find a clue a cruise i can immediately get quarantine in and im going to watch the rest of the queens gambitt. Joe Bloomberg Technology is up next. This is bloomberg. When you switch to xfinity mobile, youre choosing to get connected to the most Reliable Network nationwide, now with 5g included. Discover how to save up to 400 a year with shared data starting at 15 a month, or get the lowest price for one line of unlimited. Come into your local xfinity store to make the most of your mobile experience. You can shop the latest phones, bring your own device, or trade in for extra savings. Thats simple, easy, awesome. Visit your local xfinity store today to ask, shop, discover the latest on xfinity mobile. Emily i am emily chang and this is Bloomberg Technology. Dwindle,ys in Office President trump is making waves, signing an order banning americans from investing accompanies the white house as support the chinese military. 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