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  • The streaming video market is about to get

  • crowded.

  • It is a giant arms race.

  • The streaming landscape has been getting more

  • competitive.

  • Linear TV, no offense to what we're doing right

  • here, is in trouble.

  • Netflix, Hulu, Amazon Prime Video and others are

  • about to come head to head with the likes of

  • Disney Plus, Apple TV Plus, HBO Max and CNBC's

  • parent company Comcast NBCUniversal.

  • It's been dubbed the streaming wars.

  • A lot of people are figuring out where they want

  • to position themselves for the future of TV.

  • In 2017, 61 percent of adults 18 to 29 year olds

  • said they primarily watched TV through a

  • streaming service, compared to just 31 percent

  • who watched cable.

  • There's gonna have to be winners and losers here.

  • So who's going to win, what's going to happen to

  • cable, and what will happen when customers have

  • to pay just as much, if not more, for all their

  • streaming services as they would have for cable?

  • Are we headed toward a future where an aggregator

  • will simply bundled together popular streaming

  • services, and will the cost of that be close to

  • the cost that people pay for cable?

  • And the answer to that may very well be yes.

  • Let's start with who's doing what.

  • Disney announced the details of its Disney Plus

  • platform in April of 2019, touting all of its

  • franchises and acquisitions like Marvel, Star

  • Wars, Pixar, National Geographic and 20th Century

  • Fox.

  • Disney has the best chance just because of its

  • very, very popular content and the money and

  • distribution and the Disney name it's put it

  • behind.

  • That's going to cost customers $6.99

  • a month or $69.99

  • a year.

  • Most recently, Disney announced it will also be

  • offering a bundle, including Disney Plus, ESPN

  • Plus, an ad-supported Hulu.

  • Disney Plus and the bundle will be launching on

  • November 12th, 2019.

  • We've partnered with the most thoughtful,

  • accomplished, and award winning group of creative

  • visionaries who have ever come together in one

  • place.

  • Apple announced Apple TV Plus at a keynote in

  • March of 2019, which will feature original

  • content from some of the most prominent producers

  • and actors like Oprah Winfrey, Steven Spielberg,

  • Jennifer Aniston and Reese Witherspoon.

  • Apple TV Plus is set to launch in the Fall of

  • 2019, but the price has not been announced.

  • HBO Max is slated to launch its beta in late 2019

  • and will feature content from a variety of assets

  • owned by its parent company, AT&T and Warner

  • Media. Warner Media hasn't released the pricing

  • for HBO Max, though it's expected to be somewhere

  • around $15 to $18 a month.

  • It will offer all of the programming you already

  • get on HBO, which is probably the most

  • competitive product in terms of quality, plus

  • it's going to offer you all of the programming

  • that lives in the Warner Brothers universe,

  • whether it's Friends or DC Comics, and then you

  • throw in original programming on top of that.

  • Viacom and CBS have held extensive merger talks

  • which would put them in good standing for a

  • streaming service.

  • This service could include the Star Trek movies,

  • programming from Comedy Central and shows that

  • currently stream on CBS All Access, CBS' current

  • streaming service that already boasts 8 million

  • subscribers. CNBC's parent company, NBCUniversal,

  • is taking a more cable-focused approach, which

  • makes sense as NBC is owned by cable provider

  • Comcast. NBCUniversal announced the service would

  • be free to cable customers, and while it hasn't

  • announced a cost for cord cutters, sources say it

  • will probably be $10 or less per month for

  • customers without cable subscriptions.

  • NBCUniversal's product will be ad-supported.

  • So whether you are a cable subscriber and you get

  • the product for free or you are a cord cutter

  • paying $10 a month, that product will have

  • advertisements in it.

  • All of these streaming services have created

  • multiple bidding wars from networks to buy back

  • their content from Netflix.

  • Warner Media will spend $85 million a year for

  • the next five years to stream its popular sitcom

  • Friends. NBCUniversal will shell out $100 million

  • a year for the next five years to take back the

  • rights to stream its own show, The Office. And

  • Disney will be pulling all of its movies from

  • Netflix in 2019 as it rolls out Disney Plus.

  • These companies will also be creating content

  • specifically for their streaming services.

  • Netflix alone spent $12 billion on original

  • programming in 2018 and is expected to spend even

  • more in 2019.

  • Very, very few companies can match that.

  • OK, Apple could.

  • You know much HBO was spending on content?

  • It's about $4 billion a year, like, Netflix is

  • actually dramatically outspending them.

  • Hulu and Amazon invest large sums of money in

  • original programming, too, and CBS has exclusive

  • content for its All Access streaming service

  • that's not available on CBS' TV station, like

  • Star Trek Discovery.

  • You absolutely need to have your own original or

  • at least exclusive content.

  • That's how are you going to drive people to a

  • director consumer product when you offer

  • something that you can't get elsewhere.

  • Netflix has gone from largely reselling other

  • people's content to really heavily investing

  • billions of dollars in original content that

  • can't be taken away from them.

  • So why now?

  • Netflix has been serving streaming content since

  • 2007 and introduced its first original show,

  • House of Cards, in 2013.

  • It was clearly on to something, but most content

  • creators wanted to see if the trend stuck around.

  • The more successful we were at building an

  • on-demand subscriber base with content, the more

  • likely they were gonna be to stop licensing to

  • us, right?

  • It's actually one of the reasons why we started

  • original content in the first place, because we

  • believed this shift would all happen.

  • It's just taken many years longer than

  • we thought.

  • For several years, while Netflix gained in

  • valuation, the party line among traditional media

  • executives was, 'this is a flash in the pan.

  • What we want to do is protect the cable bundle.

  • We don't want to self-imposed the destruction of

  • this. It's our golden goose.'

  • What has happened in the past couple years is an

  • evolution of thinking that the bubble in Netflix

  • is not actually going to burst.

  • In fact, Netflix stock rose over 2000 percent from

  • the beginning of 2013 to early August 2019.

  • Now, with streaming content solidified in the

  • consumer market, content creators and media

  • outlets all want a piece of the pie.

  • The more choice they get, the less they need the

  • traditional cable bundle.

  • And so what we should see is more and more people

  • cutting the cord or cutting traditional cable.

  • Cord cutting, the process of ditching cable has

  • been on the rise.

  • The five biggest cable companies collectively

  • lost 3.2

  • million pay TV customers in 2018, and the high

  • volume of streaming services could push that

  • number even higher.

  • All of broadcasting is in danger.

  • The only people who are willing to watch

  • commercials are people who can't afford to buy

  • the goods that are being sold.

  • That's an existential, long-term issue.

  • But it's not lights out for cable just yet.

  • There are things that cable offers that streaming

  • services don't.

  • The live news, the live sports, that's not yet

  • included in these streaming services and it has

  • kept the traditional cable bundle alive.

  • It's a jolting experience to have to navigate

  • multiple apps on a TV, and so high level speaking

  • cable is a great value proposition from a product

  • standpoint, bringing it all together.

  • And because the cable providers are also providing

  • the internet access to make the streaming

  • possible, they are at an advantage.

  • So everyone's talk about cord cutting, cord

  • shifting, cable companies, their businesses are

  • just going to cord shift onto a new medium that's

  • that's Internet based.

  • 'So even if we lose you and we only sell you

  • broadband internet, we don't care because we're

  • only breaking even.'

  • Goldman Sachs calls this the point of

  • indifference.

  • Analysts are also speculating how this will affect

  • big players like Netflix, Hulu and Amazon.

  • No one's going to compete with Netflix and grow

  • subscribers. I believe they have won the game.

  • And I think that there's nothing that I can see

  • that's going to dislodge them.

  • There's gonna be a tremendous amount of

  • competition coming in over the next two to three

  • years. I wouldn't want to be in a position of

  • competing against Amazon, Apple, Disney, Comcast,

  • AT&T.

  • Not only could streaming cost as much as cable,

  • but users would also have to navigate a

  • complicated and segmented landscape of products

  • to get to the content that they want.

  • Do people want to sign up for six different

  • streaming services.

  • Everything is going to be behind its own silos.

  • It's just creating a fragmented media world.

  • There might even be the potential of a company to

  • bundle all of these products together under one

  • umbrella product.

  • Everyone's talking about Apple TV Plus. Where

  • I put Apple into this fight is there Apple TV

  • app. Everything can be watched and aggregated

  • through the TV app.

  • So what are the benefits?

  • Well, customers will get to pick and choose what

  • services they want to spend their money on.

  • Don't care about Disney movies?

  • Don't get it service.

  • It's that simple.

  • Consumers will have more and more choice on what

  • they choose to buy.

  • And maybe they buy three streaming services.

  • Maybe they buy five.

  • Maybe they buy one.

  • We'll have to wait and see how this all shakes

  • out. But some casualties will be expected.

  • There are simply too many streaming products that

  • the entire ecosystem won't work with all of them.

  • I think some will see return and some will realize

  • we just put a lot of money into something maybe

  • we shouldn't have.

The streaming video market is about to get

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Disney And Apple Take On Netflix In The Streaming Wars

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