Netflix disappointed Wall Street with its latest quarterly report so shares fell 14%. However, it's been shooting up for several years, reaching the status as one of the FANG or FAANG stocks, the giants of the NASDAQ and S&P.
Even thought they fell short of projected new subscribers, they now have 130 million subscribers around the world and account for 8% of all TV viewing. They will spend $8 billion this year on content development, a number that has been steadily going up.
Netflix skeptics point out that they borrow to fund that development but it seems like they have to show subscriber growth, not big profits or cash flow numbers.
Amazon Prime is another big player, especially to the extent that it drives subscriptions of Amazon Prime. While there have some highly acclaimed shows and they are spending a lot on some content derived from Lord of the Rings, they haven't had as many hits or shows which have become cultural touchstones like Game of Thrones.
There are smaller players like Hulu and Vudu but competition is expected to heat up with Disney and Apple expected to offer original streaming content. One has a huge library of content while the other has very deep pockets.
There doesn't seem to be a huge barrier to entry, to establish a national or global streaming service. Disney and Apple would be starting from zero infrastructure and zero content and infrastructure.
Of course with more players bidding for a finite amount of content, capital or operating costs may become a barrier. For instance, maybe a startup would have a much more difficult time entering this streaming market versus say 5-10 years ago.
Unless prices increase dramatically, maybe there will always be say half a dozen players? Or could it be that most people sign up for the one with the most shows they want to watch and really don't have time for more than one service, despite the cost.
Or would some people subscribe to a service with fewer shows but they're willing to do it for just a couple of shows that their main streaming service doesn't have? Could there be content which is compelling enough for people to subscribe to wherever that content is streamed? There are already bidding wars but they're not for proven shows. What if with enough streaming services, content creators sign limited-duration contract, like pro athletes, so that they could have competing services bid up the rights every few years?
Even thought they fell short of projected new subscribers, they now have 130 million subscribers around the world and account for 8% of all TV viewing. They will spend $8 billion this year on content development, a number that has been steadily going up.
Netflix skeptics point out that they borrow to fund that development but it seems like they have to show subscriber growth, not big profits or cash flow numbers.
Amazon Prime is another big player, especially to the extent that it drives subscriptions of Amazon Prime. While there have some highly acclaimed shows and they are spending a lot on some content derived from Lord of the Rings, they haven't had as many hits or shows which have become cultural touchstones like Game of Thrones.
There are smaller players like Hulu and Vudu but competition is expected to heat up with Disney and Apple expected to offer original streaming content. One has a huge library of content while the other has very deep pockets.
There doesn't seem to be a huge barrier to entry, to establish a national or global streaming service. Disney and Apple would be starting from zero infrastructure and zero content and infrastructure.
Of course with more players bidding for a finite amount of content, capital or operating costs may become a barrier. For instance, maybe a startup would have a much more difficult time entering this streaming market versus say 5-10 years ago.
Unless prices increase dramatically, maybe there will always be say half a dozen players? Or could it be that most people sign up for the one with the most shows they want to watch and really don't have time for more than one service, despite the cost.
Or would some people subscribe to a service with fewer shows but they're willing to do it for just a couple of shows that their main streaming service doesn't have? Could there be content which is compelling enough for people to subscribe to wherever that content is streamed? There are already bidding wars but they're not for proven shows. What if with enough streaming services, content creators sign limited-duration contract, like pro athletes, so that they could have competing services bid up the rights every few years?
