Bob Iger Hinted At Disney's Next M&A Move And It Could Be A Big One

Walt Disney Co DIS reported mostly disappointing Q3 numbers on Thursday, but the stock is up about 2 percent Friday. Perhaps the reason for the market’s optimism has to do with CEO Bob Iger’s comments on selling content directly to customers.

When Iger was asked on the company’s earnings call about potential acquisitions of Twitter Inc TWTR or Netflix, Inc. NFLX, his answer included the following hints about Disney’s strategy going forward:

“We think there's some really interesting opportunities, given what's going on from a technological perspective, to both improve our businesses and also improve the consumer experience by selling directly to consumers… we're obviously interested in the opportunity that exist today to have more direct relationship with the consumer.”

That answer coupled with Disney’s recent minority stake in streaming video company BAMTech may be an indication that the company is about to make a major move into over-the-top streaming. At this point, building a service from scratch would be a challenge considering the well-established competition.

However, with cash on hand of more than $5.2 billion, Disney could choose to make an instant splash by snatching up a well-established service like Netflix or Hulu. Netflix already has a deal in place with Disney for exclusive rights to Disney films, including Star Wars and Marvel movies.

If Disney instead chooses to build its own service from scratch, it could follow a similar route as AT&T Inc. T, which made a major move for network content when it bid for Time Warner Inc TWX. Disney already has its fair share of network content, but the launch of an over-the-top service could still get a boost by the addition of a network target such as Discovery Communications Inc. DISCA or AMC Networks Inc AMCX.

At the very least, Iger’s comments suggest Disney may soon be making a major shift in the way it distributes its content. That attitude seems to be just what the market was hoping to see.