Dow Jones Lower as Disney Mulls Skipping Theaters, Microsoft Makes Teams Video Calls Free for Now

The Dow Jones Industrial Average (DJINDICES:^DJI) was struggling on Friday as cases of COVID-19 continued to surge across the United States, and as various Federal Reserve lending programs were terminated effective Dec. 31. Johns Hopkins University reported nearly 190,000 new COVID-19 cases in the U.S. for Thursday, a new daily record. The Dow was down about 0.4% at 1:40 p.m. EST.

Shares of Walt Disney (NYSE:DIS) and Microsoft (NASDAQ:MSFT) declined along with the Dow on Friday. Disney is reportedly considering releasing some of its upcoming films on its streaming service and bypassing theaters, and Microsoft made video calling via its Teams app free for the foreseeable future.

A still from Disney's upcoming Cruella.

Image source: Disney.

Disney toying with more streaming movie releases

Deadline Hollywood reported on Thursday that Disney was considering skipping movie theaters and going straight to streaming for a number of its high-profile upcoming films. With over 73 million subscribers to the Disney+ streaming service, the company will certainly have a big audience if it goes the streaming route.

Disney is reportedly considering shunning movie theaters due to uncertainty surrounding the movie theater industry. Cases of COVID-19 are surging almost everywhere in the United States, and new restrictions aimed at slowing the spread could force theaters to close. Michigan issued an emergency order earlier this week banning large indoor gatherings that specifically targeted entertainment venues, and similar orders in other states could be coming soon.

The films Disney is considering for streaming include Cruella, Pinocchio, and Peter Pan and Wendy. Deadline Hollywood couldn’t say whether Disney was planning to charge an additional fee to subscribers for these movies like it did with Mulan. That strategy could work for family-friendly films, given the high cost of taking a family to the movie theaters. But nobody likes added fees.

Disney’s studio entertainment revenue plummeted 52% in the fiscal fourth quarter, but the direct-to-consumer segment which contains the company’s streaming services enjoyed 41% growth. The direct-to-consumer segment isn’t yet profitable for Disney, but it may not take all that long to turn those losses into profits if the company can keep racking up subscribers.

Shares of Disney were down about 0.11% by early Friday afternoon. The stock is down just 2% since the beginning of the year despite massive disruptions to its business.

Microsoft one-ups Zoom

Video conferencing phenom Zoom Video Communications (NASDAQ:ZM) announced a few days ago via a tweet that it was lifting the 40-minute limit for all meetings for Thanksgiving, effective from 12 a.m. EST on Nov. 26 through 6 a.m. EST on Nov. 27. While Zoom’s paid plans don’t limit group meetings, the company’s free basic offering puts a 40-minute cap on anything other than one-on-one meetings.

Zoom’s biggest competitor may be Microsoft Teams, the tech giant’s collaboration offering that has been quickly gaining users. Microsoft CEO Satya Nadella said during the company’s latest earnings call that Teams had 115 million daily active users.

Microsoft outdid Zoom on Thursday when it announced various features available in preview for the Teams desktop and web apps. One of those features is the ability to “talk all day for free with friends and family via video or audio calls.” In a footnote, Microsoft elaborated: “To help you stay connected in the coming months, you will be able to meet for 24 hours with up to 300 participants until further specified.”

Teams is part of Microsoft’s ecosystem of productivity products. Offering a more generous free tier than Zoom could help the tech giant reel in new subscribers to its subscription products. Microsoft stock was down about 0.2% by early Friday afternoon, while Zoom stock had gained around 7%.

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