Streaming Wars Are So Stupid
The Streaming Wars have been going on for a few years now. Since about 2019, so four years ago, Disney, Netflix, HBO, Apple, NBC, Amazon, and some other minor players have entered at various times into the streaming space. Obviously, Netflix was first, and for some reason, every other company that owned creative intellectual property decided around 2017/2018 that they reallllly wanted their own streaming services. Over the past four years, consumer has been asked to spend more and more money to subscribe to this service or that service so they can watch this Oscar-winning movie or this Emmy-winning show. You should subscribe to Disney+ because they have The Mandalorian and because your kids need something to watch, Hulu for live TV, Netflix because you’ve been subscribed to them for the past decade, HBO because they always have excellent content, Apple for Ted Lasso, Peacock (NBC) because you like The Office, Brooklyn-99, and Parks and Rec, (all of which are on Hulu on demand) and Amazon because the movie you actually want to watch isn’t on any of the other million services you’re subscribed to. The bottom line is that this is not sustainable. In this arms race, each service must spend millions upon millions (or if you’re Amazon, 1 billion on one mediocre show) each year to make original content and not lose ground to one of their competitors. The mergers have already begun on the lower levels of the streaming wars, as Paramount merged with Showtime. That should bring their total up to twelve subscribers (the only Star Trek fans left.) Disney has gone the opposite direction, relaunching ESPN as its own service for some reason and further spreading out the industry. For Disney, to win the Streaming Wars they just have to bundle, all of their content into one app. And now we return to the cable bundle which worked so well for so long. This cycle of breaking apart just to coalesce just to break apart is very Three Kingdoms and is inevitable. The small loser companies like Paramount will get destroyed and their meager IP will be bought up. The inept but improbably large companies like NBC will slowly lose influence and be divvied up. Amazon and Apple aren’t entertainment companies, just tech giants with some loose change, and will be unwilling to make the necessary sacrifices to expand. They will likely just stay in their own bubble, and neither contract nor expand. That just leaves the big boys who are most efficiently run, and who already have enough of a headstart to not drown in the wake of others. These three are HBO (Discovery-owned,) Disney, and Netflix. It will be one of these three who eventually comes out on top. A good case could be made for any of these to remain on top. HBO consistently comes out with great content and has been a staple at the top for so long. Disney has legions upon legions of intellectual property to draw upon and is diversified enough so that they have the ability to maybe possibly continue. Netflix is really the first streaming service and is the only one to make a profit. They have been consistently making bank for a decade now, and despite many waiting for their downfall, they have maintained their position at the top. Unfortunately, for all three of these companies, they have equal if not larger negatives weighing them down. HBO has had shaky leadership for a while, rebranding constantly, being sold, and bought at a consistent pace, and they are by their own admission cash-strapped right now. Disney just fired their CEO, and Disney+ sucks. They have sucked most of their IP dry with their biggest winners Marvel and Star Wars struggling to maintain high-quality levels. For Netflix, it feels like they just lack the quality on their streaming service to maintain their position. Seriously, when was the last time you went on Netflix and sat down to watch? If I had to make a pick, I would choose Disney. They have been around for 100 years, and throughout that time have consistently adapted to change. They have too much muscle to get pushed over, but they’re going to need to make some moves. I currently own their stock and am optimistic about their future. The scariest thing about Disney for me is their lack of leadership. Bob Iger is a great leader, and I hope he stays at Disney for decades to come, but he consistently has struggled with succession (great show) plans and he is 72. He looks great for 72, but I just don’t know how I feel if he leaves. As of writing this, however, Disney is the lowest it has been for nine years and I promise it will go back up. Even if you don’t believe in the company just buy and hold for six months and see what it does.
