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Streaming Industry Seeing A Low Tide

In 2018-19 when Disney+ and other streaming services were just a concept.

Netflix created a massive empire moving from DVD rentals to the square screen. This created large spending on content by a non-studio company resulting in a change of many dynamics of the years to come.

Though many investors and others dismissed the capacity of burning such a large amount of cash quarter after quarter the high tide or let's say tsunami of subscribers made headlines that could not be ignored.

This surely resulted in what is called today Streaming Wars. The problem with such competition is the cash flow resources and content that is available with others. To give an example, Disney+ within twelve months of its launch reached the total subscribers that were estimating them to take three to four years. Result of this the planned content spend of $2Bn over five years was increased to $9Bn.

It is just one example but the total content spend and the speed of cash flow burn by the industry is astonishing. But as every industry faces a phase of plateau the time for this industry has also come. As the tide of subscribers turn lower and the fight for one increases. This is witnessed by Netflix's latest quarterly subscription of only 2.5 million which was the lowest in many quarters.

Such trends and large content spending with delayed projects are not very healthy signs for any investor or companies involved. There may be a consolidation phase on the horizon resulting in fewer surviving this phase that could last two to three years.


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