In Focus: Netflix and the Streaming Wars
Thanks for checking out this week's In Focus, our look into a company, companies, or markets that made Wall Street's news cycle. This week we bring Netflix and the rest of the streamers in focus.
In my youth there was one main battle for your television, cable or no cable. If you could afford it you had cable and if you couldn't afford it you didn't.
Fast forward to the cord-cutting phenomenon, which isn't a phenomenon to me, cable is f*cking expensive. But now viewers have a choice, lots of choices, but I wonder, are we the consumers headed back to high monthly bills for television entertainment?
This week Netflix (NFLX) raised it's prices $1-$2 depending on the plan. Netflix's reasons for the price increase, more content. If you're a Netflix subscriber, you can't argue with the amount of original content they provide. Not to say all Netflix content is great, but they've had some real big winners, Bird Box being the latest. Whether you loved, liked, or hated Bird Box, your monthly Netflix subscription gave you access to the months most talked about movie, plus more.
There are a lot of streaming/subscription options out there for viewers
Netflix $12.99/month for a standard plan
Hulu $7.99/month with ads $11.99/months no ads
CBS Access $5.99/month with limited ads $9.99/month no ads
HBO Now $14.99/month
This week NBC announced it will enter the streaming wars. Their service will be an ad-supported service that is described as more Hulu than Netflix according to reports. The subscription price hasn't been announced yet.
Who Will Win the Streaming Wars?
Netflix will continue to win the streaming wars. Netflix will lose some subscribers due to the price hike, but where will they go? Hulu? That's a viable option, a good replacement for Netflix, but that's the only good option right now not including cable. Disney+ is said to premier this year, but what will that be like? Will it only be Disney content and properties of Fox gained in the acquisition? I've discussed Disney+ before and whether or not Disney will make their entire catalog available for streaming, which I don't believe they will.
The Apple of Wall Street's Eye!
Follow the subscribers, because that is the ticket. The subscription model is the apple of Wall Street's eye. Company's like Netflix, Adobe, and Microsoft have seen their stock prices sky rocket because of it. It makes sense, a subscriber represents the closest thing a company can get to guaranteed income.
The streaming wars are great for the TV viewers, it's content á la carte. NBC's jump into the streaming war will have little to no effect on Netflix.
Netflix is the 5th channel, they are the default streaming choice. Netflix added almost 8 million subscribers in the last quarter, and now has 139 million subscribers, that's a big head start on Disney and others.
Source: Yahoo Finance
The Netflix sell off has provided investors with another opportunity to buy Netflix. The company is only going to get bigger and better. Netflix will slow down one day, but no time soon, invest while you can.
This is where I leave you with, a buy on Netflix. Thanks again for checking out In Focus, may your next investment be your best investment.