Apple and Disney, a match made in streaming heaven: Analyst

Apple (AAPL) could make big moves in the streaming space with a purchase of The Walt Disney Company (DIS) says Laura Martin, Needham & Co. Senior Media & Internet Analyst. Martin joined Rachelle Akuffo on Yahoo Finance live to talk Warner Bros. Discovery (WAB) earnings, which showed the company's streaming platforms will turn a profit a year earlier than expected. Still, Warner Bros. Discovery faces challenges with "a broken film content creation engine" that's been on a "cold spell" for the past five years, says Martin. Apple is a strong distribution platform, and would stand to benefit from buying a "successful and healthy film studio." Enter: Disney.

If they combined, Apple (AAPL) and Disney (DIS) would stand to benefit from "a lot of synergies" between Apple's strong distribution network of iPhones and Disney's powerhouse content, says Martin. But hope is not lost for Warner Bros. Discovery. The company has a "big library" of names, with plans to launch another Superman movie to bolster the D.C. Comic brand. Martin says she expects Warner Bros. Discovery (WBD) to look to Paramount (PARA) as a potential acquisition opportunity, given Paramount's recent sliding stock. Martin says Warner Bros. Discovery is "just managing the same company" as Paramount, but better.

In her full interview, Martin dives deeper into Warner Bros. Discovery earnings with Rachelle Akuffo.

Key Video Moments

00:00:15 It's "unclear" WBD can make successful movies

00:01:01 Opportunities for synergies between AAPL, DIS

00:01:32 WBD should look to buy Paramount

Video transcript

LAURA MARTIN: You know, we're arguing that Apple should buy the Walt Disney Company. The issue here is I think we have a broken film content creation engine, where it's not-- at Disney the company, it is not broken. But here at Warner Brothers, it's unclear they can actually make like DC comic movies.

So Batman has been successful. They're going to launch another Superman, so we'll see. But the Warner Brothers film studio has been sort of on a cold spell for the last five years, and Apple can't help with that. Apple is a distribution platform, so Apple would really need to buy a successful and healthy film studio to make content, not a broken one.

- And so then what would be the biggest selling points in terms of the synergies that you already see between Apple and Disney?

LAURA MARTIN: Apple and Disney, so the great thing is the brand consistency, right, world class brands in both cases. You'd be adding 100% omnichannel touch points, because you can touch consumers in theme parks, which Apple can't do. And then you would also have two billion active devices in Apple. You could do some of the content of the Walt Disney Company exclusive to Apple for a certain window, three months or something, which would drive Apple iPhone penetrations.

So there's a lot of synergies always between distribution, which is what Apple iPhones are, and in content, which is what Disney is. So we think that's an interesting-- but WBD does have a big library. I think it's still in the turnaround phase. We expect WBD to look at Paramount as an acquisition. They reported their stock was down over 20% yesterday. And Warner Brothers is just managing the same business better than, I think, Paramount is. So that's the one, I think, Warner Brothers should buy.