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January 31, 2013
Edited: January 31, 2013
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It's about streaming video. It's damn big.
Headline today states, 'Netflix's content a Game Changer'. Netflix's move into cable TV territory with introduction of original content could shift the business
There are a number of big media players right now. In five years some of the bigger names will be GONE! Well, at least as far as DOMINANCE is concerned! The players: well, some of the bigger names are Time-Warner, GE (owns Comcast,NBC), DirectTV, DISH, NewsCorp, Viacom, CBS... among others. Oops, left out Number 1. Rrrrh, uhhhh...many probably don't know..IT'S THE DISNEY COMPANY! DIS (Disney) is the largest media conglomerate on earth! DIS major properties include ESPN, ABC, Disney channels, Pixar, Marvel studios among others. In fact 6 companies control 90% of the media we watch.
Let me repeat. In five short years some of the top 6 names in media that control 90% of the media we watch will, if not eradicated , will no longer be a factor, will no longer dominant. In 1983 at least 50 companies controlled what we watched, at the end of 2012, it dropped to six. In five years it will be less than six.
So...where's Netflix (NFLX) in all this?
Well, the future is streaming. Netflix is the current leader. It has more streaming subscribers than anyone else, including HBO. The days of people paying a provider $100-175.00 a month to watch just 5% or less of the channels they prefer won't come soon enought! NFLX allows us to stream movies and TV shows but now....now it's on the advent of must-see first run must see streaming media. It has House of Cards ready to go with a top notch actor. If you want to see House of Cards, the only way is via streaming video from Netflix. This is only the beginning. And for the most part, if others what to stream using a major subscriber audience, the road is via Netflix.
So where's DIS (Disney) in all of this?
Disney gets over half it's profits from ESPN. Once Disney figures out a graceful way from this mighty brands to transition to stand-alone streaming, watch out! ....and what about developing must-see streaming content with it's major properties it owns?
So what does Neflix need now? It has to fend off major competitors and it needs capital to grow subscribers and develop must-see streaming. Wait a minute! Netflix doesn't have a cache of cash.
Can it do it alone? Maybe, maybe not. A partner will give it 'a best chance to succeed'. Is there anyone out there who might be interested. Is there any companies out there who are striving for dominance. Of course, and I'm not gonna give you the names.
Get ready for the biggest war for Media Dominance. Coming to a neighborhood near you.
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(Footnote: I have blogged in the past about AAPL buying out NFLX. If they did, AAPL's stock now would be over 1000. It didn't happen and AAPL has missed it's chance. I don't see them as a suiter now).
