Media Streaming Trends
If you have a Netflix account, you are not alone. Streaming services continue to capture market share and we believe this trend will continue.
We also believe that as this trend moves forward, consolidation will occur. Reports in the media suggests that Disney is in talks to buy the remaining portion of Hulu it does not currently own. CNBC provided an interesting summary of this potential transaction. An excerpt is provided here.
Comcast has had a frustrating run as a partial owner of video streaming platform Hulu, but that doesn't make the decision to sell its minority stake in the company any easier.
Disney and Comcast are holding talks about working out a deal for Comcast's 30% stake, according to people familiar with the matter. Comcast is now weighing the pros and cons of doing a deal now rather than later, said these people, who asked not to be named because the discussions are private. It's still unclear if a deal will transpire.
The two companies are the last remaining owners of a company that was originally founded as a joint venture between several media giants. Hulu last week bought back a 9.5% stake in itself from Time-Warner owner AT&T, in a deal that values Hulu at $15 billion. That 9.5% stake will be split between Disney and Comcast, unless Disney consolidates the entire company.
Source: April 25, 2019 CNBC.com article by Alex Sherman
Disney recently announced a new streaming service called Disney Plus which is expected to debut next year. You can expect to see continued efforts by companies to capture streaming market share. This will accelerate as 5G is rolled out over the next two years. We believe you will see a huge shift in the consumption of media to wireless media services. This should be a positive benefit for media companies developing content as well as cellular companies seeking to become a preferred pipeline.
Assessing these types of thematic tailwinds are an important part of the investment process at Destination Wealth Management. We carefully assess thematic developments (as well as expected future themes) as we position your strategy. We will continue to do so.
If you have any questions about this information, do not hesitate to let us know. We are always here to help.