Disney (DIS) is arguably one of the best stocks in the market today. However, their stock is currently trading at an incredible discount as investors fear the worst from ESPN. Recent research showed that entertainment habits among consumers are changing; and it's becoming a major fear among Disney investors. Today, we'll discuss how those habits are changing, how it affects Disney, what we saw in the market as a result on Wednesday and what we can expect to see moving forward. So, let's get right to it…

How Consumer Entertainment Habits Are Changing

The advent of the internet has changed quite a bit in the day to day lifestyle of the average consumer. These days, we don't have to go to the library to find books, we don't have to turn on the radio to listen to music, and we don't have to turn on the TV to watch video; the internet has changed all of that. While streaming entertainment continues to grow in popularity, it's creating major issues for the providers of other entertainment services like cable television. The reality is that with so much entertainment just a click away, the average consumer is dialing down on the cost of entertainment through other avenues; including paid subscription television.

How This Affects Disney

Disney is an incredibly profitable company. However, their most profitable franchise is a sports television network known as ESPN. Unfortunately, as consumers change their spending habits with regard to entertainment, it's causing a major problem for Disney. The bottom line is that fewer people are subscribing to ESPN; which can have a major impact on the company's bottom line. As a matter of fact, Nielsen released a research note estimating that ESPN has realized a decline of 3.2 million subscribers in just over 12 months. Even though the flagship channel still has more than 90 million subscribers overall, the massive decline is a big problem.

How The Market Reacted To The News